■1 


IMAGE  EVALUATION 
TEST  TARGET  (MT-3) 


Y 


i 


M/. 


V. 


«./- 


1.0 


I.! 


12.0 


!.8 


1-25     jU      1.6 

^ 

6" 

► 

m 


^. 


Vi 


^;; 


/A 


^'j^' 


^^ 


'/ 


Hiotographic 

Sciaices 
Corporation 


33  WEST  MAIN  STREET 

WEBSTER,  N.Y.  USSO 

(716)  872-4503 


^^■ 
^  .& 


iV 


'^ 


i 
< 


^ 


rv 


^ 


wk\ 


» 


^ 


^? 


%^ 


CIHM/ICMH 

Microfiche 

Series. 


CIHM/ICMH 
Collection  de 
microfiches. 


Canadian  Institute  for  Historical  Microreproductions  /  institut  Canadian  de  microraprodMctions  historiquas 


Technical  and  Bibliographic  Motes/Notes  techniques  et  bibliographiques 


The  Institute  has  pttempted  to  obtain  the  best 
original  copy  available  tor  filming.  Features  of  this 
copy  which  may  be  bibliographica!iy  unique, 
which  may  alter  any  of  the  images  in  the 
reproduction,  or  which  may  significantly  change 
the  usual  method  of  filming,  are  checked  below 


I    71    Coloured  covers/ 

I  V  I    Couverture  de  couleur 

□    Covers  damaged/ 
Couverture  endommagde 

□    Covers  restored  and/or  lamineted/ 
Couverture  restaurde  et/ou  pellicul6e 


D 


Cover  title  missing/ 

Le  titre  de  couverture  manque 


□    Coloured  maps/ 
Cartes  gdographiques  en  couleur 

□    Coloured  ink  (i.e.  other  than  blue  or  black)/ 
Encre  de  couleur  (i.e.  autre  que  bleue  ou  noire) 

□    Coloured  plates  and/or  illustrations/ 
Planches  et/ou  illustrations  en  couleur 


D 


D 


Bound  with  other  material/ 
Relid  ave'  d'autres  documents 

Tight  binding  may  causo  ^iistdows  or  distortion 
along  interior  margin/ 

La  reliure  serr^e  peut  causer  de  I'ombre  ou  de  la 
distortion  le  long  de  la  marge  intdrieure 

Blank  leaves  added  during  rest.^ration  may 
appear  within  the  text.  Whenever  possible,  these 
have  been  omitted  from  filming/ 
II  se  peut  quo  certaines  pages  blanches  ajoutdes 
lors  d'unr  restauration  apparaissent  dans  le  texte, 
mais,  iorsque  cela  6tait  possible,  ces  pages  n'ont 
pf)s  6X6  filmdes. 


L'Institut  a  microfilmd  le  meil!eur  exempl&ire 
qu'ii  lui  a  6t6  possible  de  se  procurer.  Les  details 
de  cet  exemplaire  qui  sont  peut-dtre  uniques  du 
point  de  vue  bibliographique,  qui  peuvent  modifier 
une  image  reproduite,  ou  qui  peuvent  exiger  une 
modification  dans  la  mdthode  normale  de  filmage 
sont  indiqu6s  ci-dessous. 

□    Coloured  pages/ 
Pages  de  couleur 

□   Pages  damaged/ 
Pages  endommag6es 

□    Pages  restored  and/or  laminated/ 
Pages  restaurdes  et/ou  pelliculdes 

0    Pages  discoloured,  stained  or  foxed/ 
Pages  d6color6es,  tachetdes  ou  piqu^es 

n    Pages  detached/ 
Pages  d^tachdes 

rri    Showthrough/ 


D 


D 


Transparence 

Quality  of  print  varies/ 
Qualit6  indgaie  de  {'impression 


j      I    includes  supplementary  material/ 


Comprend  du  materiel  supplementaire 

Cnly  edition  available/ 
Seule  Edition  disponible 


Pages  wholly  or  partially  obscured  by  errata 
slips,  tissues,  etc.,  have  been  refilmed  to 
ensure  the  best  possible  image/ 
Les  pages  totalement  ou  partieilement 
obscurcies  par  un  feuiliat  d'errata,  une  pelure, 
etc.,  ont  6t6  filmdes  d  nouveau  de  fapon  d 
obtenir  la  meilleure  image  possible. 


T^ 
to 


T» 

P< 
of 

fil 


Oi 
b( 
th 
si 
ol 
fil 
si 

Ol 


Tl 
si 

Tl 
w 

M 
di 
ei 
bi 
rh 
re 
m 


D 


Additional  commonts:/ 
Commentaires  suppldmentaires: 


This  item  is  filmed  at  the  reduction  ratio  checked  below/ 

Ce  document  est  filmd  au  taux  de  reduction  indiqu6  ci-dessous 

10X                            14X                             18X                            22X 

26X 

20X 

V 

■iMK.a 

rx 

16X 

20X 

24X 

28X 

n 

32X 


The  copy  filmed  here  has  been  reproduced  thanks 
to  the  generosity  of: 

Library  of  the  Pubiic 
Archives  of  Canada 


L'exemplaire  film*  f ut  reproduit  grAce  i  la 
gtnArositA  de: 

La  bibiiothdque  des  Archives 
publiqusk!  du  Canada 


The  images  appearing  here  are  the  best  quality 
possible  considering  the  condition  and  legibility 
of  the  original  copy  and  in  keeping  with  the 
filming  contract  specifications. 


Las  images  suivantes  ont  6t4  reproduites  avec  le 
plus  grand  soin.  compte  tenu  de  la  condition  et 
de  la  nettetd  de  l'exemplaire  film4.  et  en 
conformity  avec  les  conditions  du  contrat  de 
filmage. 


Original  copies  in  printed  paper  covers  are  filmed 
beginning  with  the  front  cover  and  ending  on 
the  last  page  with  a  printed  or  illustrated  impres- 
sion, or  the  back  cover  when  appropriate.  All 
other  original  copies  are  filmed  beginning  on  the 
first  page  with  a  printed  or  illustrated  impres- 
sion, and  ending  on  the  last  page  with  a  printed 
or  illustrated  impression. 


The  last  recorded  frame  on  each  microfiche 
shall  contain  the  symbol  ^^  (meaning  "CON- 
TINUED"), or  the  symbol  V  (meaning  "END"), 
whichever  applies. 

Maps,  plates,  charts,  etc.,  may  be  filmed  at 
different  reduction  ratios.  Those  too  large  to  be 
entirely  included  in  one  exposure  are  filmed 
beginning  in  the  upper  left  hand  corner,  left  to 
right  and  top  to  bottom,  as  many  frames  as 
required.  The  following  diagrams  illustrate  the 
method: 


Les  e;cemplaire8  originaux  dont  la  couverture  en 
papier  est  ImprimAe  sont  fiimte  en  commenqant 
par  le  premier  plat  et  en  terminant  soit  pa'-  la 
derniAre  page  qui  comporte  une  empreinte 
d'impreesion  ou  d'illustration,  soit  par  le  second 
plat,  salon  Je  cas.  Tous  las  autres  exempiaires 
originaux  sont  film^s  en  commenpant  par  la 
premiere  page  qui  comporte  une  empreinte 
d'impreesion  ou  d'illustintion  et  en  terminant  pat 
la  derniire  page  qui  comporte  une  telle 
empreinte. 

Un  dee  symboies  suivants  apparattra  sur  la 
dernidre  image  de  chaque  microfiche,  selon  le 
cas:  le  symbols  -^  signifie  "A  SUIVRE",  le 
symbols  Y  signifie  "FIN  ". 

Les  cartes,  planches,  tableaux,  etc.,  peuvent  dtre 
fiimte  A  des  taux  de  reduction  <f'  f6rents. 
Lorsque  le  document  est  trop  gr-^nd  pcur  dtre 
reproduit  en  un  seul  cliche,  11  est  film*  A  partir 
de  i'angle  supArieur  gauche,  de  gauche  A  droite, 
et  de  haut  en  bas,  en  prenant  ke  nombre 
d'images  nAcesseire.  Les  diagrammes  suivants 
iliustrent  ia  mithode. 


1  2  3 


32X 


1 

2 

3 

4 

5 

6 

BENS  ALEM ; 


)'. 


OB, 


■t^rii:^;?^-.'* 


THE  NEW  ECONOMY. 


•  ■••  •■ .   • .     . 


A  DrALOGUE  FOR  THE  INDUSTRIAL  CLASSES 
ON  THE  FINANCIAL  QUESTION. 


•♦-.!n**^:. 


BI 


THOMAS    GALBRAITH, 

PORT  HOPE,  ONT. 


"  SesJiirity  to  property  is  the  grandest  achieve- 
ment of  legislative  wisdom." — SisftTaAM. 

"  I  send  no  agent  or  medium  ;  I  offer  no  repre- 
sentative of  value;  l)ut  I  offer  tlie  value  itself." — 
Whitmaic. 


=V.i 


J^K  W     YORK: 
THOMA.S  GALBRAITH,  JR.,  PUBLISHEB  AND  PRINTER, 

32      BEEKMi^N      STBXiBT.. 

1874.       ;?:v  v^cS 


I 


# 


■  i    ,1 


?    '   .' 


il 


am 


!-\l 


vr. 


i  'jy'.r 


)i  ir;/; 


I  - 


•>■  i'.  -<?*>'  1 


W 


Si 


1* 

i, 
I 


BENSALEM; 


(>U. 


THE    NEW    ECONOMY. 


A     DIALOGUE    FOR    THE    INDUSTRIAL    CLASSES, 
ON  THE   FINANCIAL   QUESTION. 


BY 

THOMAS      G  A  L  B  R  A  I T  H  , 

PORT    HOPE,     nST. 


"Security    to    property    is    the    gra.Kle*.t    achievement    of 
legifilative  wisdom.    -Bentham. 

"I  send  no  agent  or  medhim ;    I    offer   no    representative 
of  vahie;  but  I  offer  the  vahie  itself.'-  Whitman. 


A  E  W    Y  O  R  K  : 
THOMAP  GALBRAITH,  JR.,  PUBLISHER  ANP  PRIKTER. 

32      BpEKMAN      8TBEET. 
1874. 


H;l 


Entered  according  to  Act  of  Congress,  in  the  year  iST*,  by 
THOMAS    OALBRAITH,  JR., 
in  the  f)ffli-e  of  the  Itibrarian  of  Congress,  at  Washington,  B.  C, 


CONTEN  TS. 


The  PoLiTicAi  Economt  or  the  Pebiod-The  Contrast 

Bbtwebw-  Eich  and  Poor 
The    Solution    of    the    Capital   and  Labor    Question 

INV0I^▼ED   IN   THE  RaTE  OF   INTEREST 

BtJiLDiNO  AND  Loan  Soctetieh 

Canadian  Banking  and  Mercantile  Agencies 

The  Bank  of  England  .  .  ■  ' 

Paper  Monet  .  .  •  •  • 

A  National  Cubbbnct  .  .  •  • 

On  Sbcubitt 

Cbbdit  Foncier  Sooietieb 

The   First    Mortgage    on    Productive    Property    the 

Best  Security 
The  Sbouritt  Bank  of  Issue 
Closing  Address  .  .  •  •  • 


Page. 

7 

18 

29 

31 

*0 

4L' 

44 

47 

50 

o4 

o6 
66 


■it 


PREFACE 


I    HAVE    niulevtakcu    to   px.unin.'    in  tho    following    pft^t^s 
grave   ana  iuipovtaut  }.uhli(;  Huestions  divfctly    affoctii.r^   wi.le- 
spvead  iutorests  :  and  as  tin-  vi.'ws  aavanced  art^  oppos-d  !<»  v.'V> 
geufvally  m-i'^vtea  opinions,  an  apology    laiKlit  be  thouglU   .lue 
for  the  attitude  1  Uuv.-  assinnod.     In  reply.  1  have  to  say   Iho 
aiseusHion  of  such  .luestioiiH  UHually  involven  a  penalty  in  pvopor- 
tiou  to  the  truth elicitea:  ami  as  to  the  truth  of    u.y  .-onclusious. 
if  the  arguuientH  are  unsound,  they  are  the  more  easily   refuted. 
But  if  the  sensitiven»'s«  of   those  interests  remarked  upon  arise 
from   their  intrusive   charaeler  as  partaking  of  privileges  to  au 
ivreBponsible  degree  -throwing  them  out  of  line  with  the  leading 
charactexistics  of  the  age -then  may  not  an  upoh.gy.be  due  to 
the  public  from  a  different  quarter? 

Providence  has  thrown  into  the  hands  of  enngrants  from 
Europe  and  their  descendants,  the  glorious  legacy  of  America, 
with  an  unparalleled  future:  but  th^  legatees,  apparently  uncou- 
aciouK  of  the  priceless  gift.  have,  in  a  great  measure,  failed  to 
turn  it  to  account. 

It  is  said  that  men,  as  a  rule,  think  and  :  as  they  have  been 
accustomed;  and  this  instance  proves  no  exc  ption.  They  have 
imported  their  delects  along  with  their  excellencies,  to  the  degree 
of  ueutraUzing,  in  a  great  measure,  the  advantages  of  their  new 


-t- 


ri 


PREFACE. 


ii 


home ;  carrying  the  weakness  to  the  extreme  of  even  labelling 
the  towns  and  cities  of  thiS  country  with  the  names  of  loved  spots 
in  their  native  land,  without  any  special  fitness.  And  from  th« 
same  source  come  also  those  crude  notions  of  economy  and  finance, 
which  have  succeeded  pretty  well  already  to  cripple  our  indus- 
try; and  merge  the  workiugman  and  his  interests  into  similar 
vortiees,  which  have  so  long  embarrassed  the  legislation  of  Euro- 
pean States.  The  situation  is  grave  enough  when  the  earnings  of 
fouv  luillions  of  people  must  anjiually  go  to  swell  the  pockets  of 
foreigr  money  lenders. 

There  can  be  no  just  reason  why  our  ^.nancial  policy  should 
not  be  upon  a  scale  adequate  to  the  magnificent  natural  resouroafc 
of  this  Western  Wovld ;  and,  it  is  to  be  hoped  the  day  is  not  dis- 
tant when,  if  a  finance  minister,  in  his  place,  should  quot«  old 
world  precedents  to  justify  his  policy,  it  will  be  accepted  aa  an 

admission  of  incompetency. 


Port  Hope,  Febmoffy,  1874. 


'\i 


BENSALEM; 


Cli, 


THE    NEW    ECOISTOMY. 


THE    POLITICAL    ECONOMY    OF    THE    PEEIOD. 
CONTRAST  BETWEEN   RICH  AND  POOR, 


-THE 


Enters  the  office  of  the  writer,  AltaUn,  a  visitor,  from  the  Island 
of  Bensalem. 

Writer. — It  is  with  pleasure  I  meet  a  citizen  of 
that  famed  counti-y.*  During  the  last  two  centuries 
the  world  has  heard  of  the  high  attainments  of  your 
people  in  the  arts,  sciences,  and  philosophy.  But  so 
far  as  I  am  aware,  very  im^^arfect  notions  are  yet 
held  in  regard  to  your  civilization ;  and  more  espe- 
cially of  your  associated,  or  what  is  termed  political, 
economy,  I  need  not  repeat,  therefore,  how  much 
I  am  pleased  at  the  prospect  of  having  my  curiosity 
and  interest  gratified  by  one  so  well  qualified  to 
answer  my  inquiries. 


*  See  BAroN's  Neio  AtlantU. 


8 


BENSALEM  ;    OB, 


f 


hi! 


Visitor. — I  shall  be  glad  to  aftbrd cxery  informa- 
tion in  my  power  with  respect  to  our  condition  as  a 
people.  Our  readiness  to  communicjite  is,  I  trust, 
equal  to  our  anxiety  to  obtain  knowledge  ;  and  it  is 
no  secret  that  our  government  has  agents  in  every 
part  of  the  world  who  are  engaged  in  collecting 
information,  and  whose  duty  it  is  to  report  accord- 
ingly of  the  doings  of  otlier  nations.  Bensalem,  as 
you  are  aware,  is  a  distant  island  of  some  5,600 
miles  in  circumference,  possessing  a  soil  and  climate 
equal,  but  not  superior,  to  other  parts  of  the  world. 
But  it  is  not  with  reference  to  its  geography,  topo- 
graphy, soil,  climate,  natural  features  or  resources, 
that  sliall  occupy  our  attention  at  present,  as  our 
Island  is  not  endowed  by  nature  above  the  oidinar}' ; 
but,  if  you  please,  let  our  conversation  turn  upon  the 
factitious  condition  of  the  country,  in  contrast  with 
the  outside  world ;  or  on  wliat  might  be  termed  a 
comparison  between  our  civilization  and  yours. 

W. — That  meets  my  wishes  fully.  I  should  feel 
deeply  interested  in  tracing  the  successive  steps  by 
which  Bensalem  has  l)een  elevated  to  its  present 
state  of  prosperity  and  felicity,  since  its  natural  ad- 
vantage?, if  I  understand  you,  are  not  peculiar,  nor 
its  inhabitants  more  highly  endowed  than  other 
nations.  I  am  of  opinion  tluit  the  condition  of  man 
is  very  much  his  own  making;  and,  therefore,  every 
just  comparison  will  serve  to  place  in  clear  light  the 
relative  merits  of  your  economy  and  oars. 

V. —  What  strikes  a  citizen  from  my  country  so 
forcibly  on  his  arrival,  is  the  extraordinary  spectacle 
of  so  mucli  M  ealth  and  luxury  existing  alongside  of 


ly. 


THE    NEW     ECONOMY. 


9 


60  much  wretchedness  and  poverty,  not  only  in 
Europe,  but  also  in  what  is  termed  highly  favored 
America.  The  contrast  between  Bensalem  and 
other  parts,  in  this  particular,  is  well  worthy  of  note. 
True,  you  have  fast  traveling  by  steam,  and  instant 
communication  by  telegraph  ;  you  possess,  also,  to  a 
high  degree  of  improvement,  every  species  of 
machinery, effecting  a  nniltiplicity  of  purposes.  Your 
mechanical  progress  is  indeed  admirable  and  com- 
plete. But  when  one  turns  to  the  social  condition 
of  the  people,  the  hideous  contrasts  between  the 
rich  and  the  poor,  arising  out  of  the  uneven  dis- 
tribution of  wealth,  also  the  many  evils  resulting 
therefrom  ;  vast  wealth  giving  its  possessor  almost 
unhmited  power  over  the  happiness  and  destiny  of 
less  fortunate  persons;  it  is,  I  confess,  appalling 
enough  to  a  stranger  from  my  country.  In  fact, 
existence  every wliere  with  you  appears  to  be  hardly 
endurable  by  a  parson  of  intelligence  and  right  feel- 
ing, when  he  perceives  such  wilful  wickedness  and 
deliberate  sellisliness  eager  to  desire  and  devour  all 
that  comes  withm  its  reach,  utterly  regardless  of  the 
suffering,  the  pain,  the  misery  by  W'hich  its  enjoy- 
ments are  procured.  Turning  to  the  columns  of  the 
London  Sj^ectator^  on  reviewing  t\ie  income  tax 
returns,  it  expresses  surprise,  as  well  it  may,  at  tlie 
small  number  of  the  really  comfortable  in  that  land 
of  millionaires  and  princes — it  being  under  one  and 
H  half  per  cent,  of  the  population :  "  Those  persons 
paying  £120  rent,  and  out  of  the  class  of  the  anxi- 
ous, and  intending  to  give  their  children  an  educa- 
tion, and  can   contemplate    a   hohday  without   any 


I 
I. 


10 


BEN8ALEM  ;     OE, 


sickening  feeling  of  despair,  are  less  than  sixty 
thousand  families.  The  taxation  of  Great  Britain, 
such  as  it  seems,  falls  upon  a  population,  seven  in 
eight  of  whom  live  in  houses  of  less  than  £20  a  year 
rental ;  that  is,  are  not  in  the  ordinary  sense  com- 
fortable at  ail,  but  struggling  to  make  ends  meet, 
always  cor  spelled  to  think  of  money.  It  is  only 
to  one  in  eight  of  the  population  that  a  sov^creign 
is  not  a  ver}'^  serious  sum  ;  only  to  one  in  a  thousand 
that  a  five  pound  note  is  not  an  important  amount 
of  money.  One  is  forced  to  acknowledge  that  while 
men  Mith  a  quarter  of  a  million  die  at  the  rate  of 
sixteen  a  year,  and  while  every  year  sees  a  new 
millionaire  enter  society,  the  number  of  the  really 
comfortable  in  Great  Britain  cannot  possibly  exceed 
seventy  thousand,  while  it  may  be  very  little  more 
than  half  of  that  number  of  families. 

"  Ten  persons  have  expired  within  the  decade  leav- 
ing more  than  a  million,  and  cue  hundred  and  sixty- 
one  leaving  more  than  a  quarter  of  a  million  sterling. 
Contrast  with  this  the  weekly  returns  of  pauperism 
in  London  :  giving  a  total  of  105,219  paupers,  of 
whom  34,322  were  in  workhouses  and  70,987 
received  out-door  relief.  The  number  of  vagrants 
relieved  on  the  last  day  of  the  week  was  792,  of 
whom  535  were  men,  198  women,  and  59  children 
Then,  it  is  said,  no  man  in  England  can  bscomo 
wealthy  without  part  of  his  wealth  going  to  the 
owners  of  the  soil,  and  especially  to  three  individuals, 
viz.:  the  Marquis  of  Westminster,  the  Duke  of 
Portland,  and  Lord  Portman.  A  corner  of  St. 
Paul's  Churchyard,  London,  sold  three   years  ago, 


THE     NEW    ECONOMY, 


11 


at  the  nice  little  sum  of  £1,100  sterling  per  square 
foot.     In  view  of  these  facts,  what  must  be  the  con- 
dition of  the  struggling  masses  ?      The  labor  agita- 
tion brings  out  that  the  agricultural  wages  in  many 
parts  of  the  country  were  from  Ss.  to  98.  a  week,  all 
perquisites  included,  and  in  many  districts  the  men 
had  to  give  fifty-six  weeks'  labor  to  the  year;    in 
many  cases  they  never  knew  when  their  work  was 
done.      One  speaker  did  not  know  whether  these 
men  were  most  to  be  commiserated  on  account   of 
their  miserable  wages  or  the  more  miserable  houses 
they  occupied.     He  had  known  thirteen  mem]>ers  of 
a  family  sleeping  in  one  roam — a  place  unfit  for  pigs. 
A  Squire,  at  a  meeting  of  Enghsh  laborers,  pointed 
with  honest  pride  to   one  who  liad   brought  up   a 
family   of  twelve   cliildren   on   12s.  a  week.     Lord 
Malnisbury,  says  a  writer,  was  astonished  at  the  dis- 
turbance ;  lie  always  thought  the  relations  between 
the  lord  and  the  pauper  peasant  the  liappiest  possible. 
It  is  the  lazy  opinion  of  the  wealthy,  says  anotlier, 
that  the  refined  affection  and  the  high  civilization  of 
the   few  should    be    supported  in    their   privileged 
existence  by  the  unremitting  and  joyless  toil  of  the 
many.      Well  do  I  remember  one  of  those  palaces; — 
the   mos!:  conspicuous  object  for  miles  around — its 
lord,  I  dare  say,  consuming  the  income  of  some  six 
hundred  of  the   poor   families  around   him.      The 
grievances  of  the  laborer  are  briefly  stated,  thus : 
Wages  are  insufficient  to  provide  suitable  food;  tliat 
they  have  no  means  of  educating  their  families ;  that 
their  liouses  are  totally  unfit  for  habitation ;  that  they 
have  no  hope  for  old  age  but  the  workhouse." 


nil" 


I  Ml 


12 


BENSALEM  ;    OR, 


Tlie  Pall  Mall  Gazette  indulges  in  the  follow- 
ing vein  of  excusable  sarcasm  :  "  Three  cases  heard 
before  the  county  justices  of  Newbury,  a  few  days 
ago,  illustrate  the  sad  want  of  self-dependence 
among  some  of  the  lower  orders.  Henry  Ballard, 
described  as  a  half  starved  spiritless  looking  man, 
was  charged  with  trespassing,  in  search  of  rabbits, 
on  certain  land  at  Chievely.  Ballard  was  weak 
enough  to  burst  into  tears,  and  ask  the  magistrate 
to  be  merciful  to  him,  on  the  absurd  ground  that  he 
had  but  eleven  slu'llings  a  week  to  support  thirteen 
children,  besides  himself  and  wife.  His  wife,  he 
said,  was  consumptive,  and  as  slie  very  much  wished 
for  a  rabbit,  he  tried  to  catch  one.  The  miscreant 
was  fined  six  shillings,  and  allowed  a  fortnight  for 
payment.  Perhaps  his  consumptive  wife,  when  she 
sees  her  husband  and  children  obliged  to  stint  them- 
selves in  their  dinners,  will  learn  that  sickly  persons 
have  no  right  to  long  for  luxuries.  In  the  meantime, 
it  is  a  satisfaction  to  feel  that  the  miserly  Ballard 
will  have  to  shell  out  some  of  his  superfluous  wealth. 
The  next  case,  almost  grotesque  in  its  character : 
Elizabeth  Volkins,  who  was  suckling  an  infant,  was 
sent  to  Reading  gaol  for  fourteen  days,  for  stealing 
several  pieces  of  brass  fittings  which  had  belonged 
to  a  threshing  machine,  out  uf  a  barn  at  Wilford, 
where  her  husband  had  worked  for  twenty  years. 
This  rigliteous  sentence  gave  rise  to  a  most  unmanly 
complaint  from  Mr.  Volkins.  '  If  the  magis^.rate,' 
he  said,  *  sent  his  wife  away,  his  six  children  must 
starve  alone,  for  his  work  was  two  miles  from  his 
His   wages   were   only   eleve'i   shillings, 


cottage. 


I 
i 


THE    NEW     ECONOMY. 


13 


which,'  he  added,  ridiculously  enough,  'is  not  much 
to  keep  eight  persons.'  It  would  be  interesting  to 
watch  the  little  Volkins  during  the  fortnight  they 
are  thrown  on  their  own  resources,  and  it  is  to  be 
hoped  that  a  few  tracts  will  be  transmitted  to  them, 
pointing  out  the  dut}'  of  resignation.  In  the  third 
case,  a  young  married  laborer  named  George  Major, 
was  charged  with  having  left  his  employer's  service 
without  lawful  cause.  The  defendant  was  hired  at 
nine  shillings  a  week,  aiid  left  his  work  because  he 
considered  he  was  not  paid  properly  for  the  services 
performed.  Mrs.  Major  is  a  delicate  looking  woman, 
with  an  infant  in  her  arms,  complaining  that  the 
•cottage  they  rented  of  her  husband's  employer  was 
in  a  miserable  state,  and  that  she  had  '  caught  her 
•death'  through  it.  The  cottage,  liowever,  seems  to 
have  been  a  most  luxurious  dwelling,  as  times  go, 
and  admirably  ventilated.  The  only  fault  urged 
against  it  was  that  it  was  partly  blown  down  before 
Christmas,  and  the  boards  were  quite  rotten  where 
the  snow  had  driven  in.  The  real  fault  rests  with 
the  occupants,  who  are  evidently  living  beyond  their 
means,  for  they  had  nothing,  it  was  stated,  but  two 
or  three  old  guano  bags  to  Imi.;'^  up  and  protect 
them  from  the  inclement  weather.  The  magistrates 
thought  the  cottage  ought  to  be  repaired,  but  fined 
Major  6s.  9d.  costs,  and  ordered  him  to  return  to  his 
work.  As  he  could  not  pay  tJie  amount,  his  master 
paid  it,  on  the  understanding  that  it  was  to  be  de- 
ducted from  the  money  due  him  at  Michaelmas.  Of 
course,  no  fine  was  imposed  on  the  owner  of  the 
cottage  for  allowing  it  to  be  inhabited  in  its  present 


14 


E£N8ALEM  ; 


OB, 


1 


! 


airy  condition,  and  Mrs.  Ma,jor  will,  perhaps,  become 
reconciled  to  it  in  time.  These  peeps  of  rustic  hfe 
in  England  jire  very  refreshing  to  us  weary  London- 
ers, and  some  of  the  incidents  related,  when  dressed 
up  with  a  little  humor  by  'dinners  out'  during  the 
season,  can  bo  made  to  appear  irresistibly  tiomic. 
The  papers  have  a  story  of  a  starving  shepherd  boy 
on  the  hills  of  Scotland  being  punished  for  appeas- 
ing his  hunger  upon  one  of  the  flock.  He  hungered, 
but  no  man  gave  unto  liim^  but  unlike  the  prodigal 
of  old,  the  lad  was  not  without  resources;  for  instead 
of  longing  for  the  husks,  he  preferred  a  piece  of 
mutton,  and  forgetting  that  'man  was  made  lor  the 
sheep,'  he  slew  one  and  ate,  and  got  punished  for 
his  pains. 

"  In  America,  tlie  aspect  of  society  is  little  better. 
Four  individuals  in  New  York  are  supposed  to  be 
worth,  at  least,  iifty  millions  of  dollars  each;  and  it 
is  estimated  that  some  two  hundred  citizens  of  that 
metropolis  are  wortli  a  million.  Several  railroad 
corporations  are  said  to  be  so  wealthy  that  they  can 
control  whatever  they  choose  to  lay  their  hands  upon, 
despite  any  legal  defense.  The  best  informed  public 
orator,  Wendell  Phillips,  discourses  thus :  'The  main 
point  he  aimed  at  was  the  contest  between  capital 
and  labor,  which,  he  declared,  was  destined  to 
eventuate  in  one  of  the  grandest  struggles  which  the 
mind  of  man  can  comprehend.  The  late  movement 
in  America  is,  in  a  sense,  in  alliance  with  progress 
in  the  same  direction  in  European  countries,  and  i» 
to-day  the  agitation  of  the  civilized  world.  The 
laboring  class  claims  a  totally  new  deal..    What  is 


THE    NEW     ECONOMY 


15 


called  Christendom  holds  about  300,000,000  of 
people,  and  it  is  a  tact  that  at  least  100,000,000 
suffer  actual  want  of  sufMcient  food  for  the  body,  as 
well  as  for  the  mind.  Four-iiftlis  of  the  people  of 
gay  and  luxurious  France,  seldom  taste  the  real 
luxury  of  living.  According  to  Cobden,  2,000,000 
of  the  population  of  beef  eating  England,  never  taste 
meat.  In  America,  one-third  of  our  40,000,000  of 
people,  find  their  lives  spent  in  the  severest  toil. 
They  rise  in  the  morning  and  toil  throughout  the 
day ;  go  to  bed  at  niglu ;  tli  '.r  sole  object,  hope  and 
ambition  being,  simply,  to  procnire  ])read.  The 
operatives  in  the  Manchester  cotton  mills,  and  other 
classes  of  laborers,  devote  their  lives  to  the  struggle 
for  the  barest  and  humblest  necessities  of  existence. 
Such  a  condition  of  life  is  not  evidence  of  tliat  broad 
humanity  and  Cliristian  civilization  with  wiiich  we 
ought  to  be  content.  It  is  a  civilization  which 
leaves  50,000,00.0  of  human  beings  on  the  verge  of 
actual  want;  and  can  come  from  no  good  source.* 
Mr.  P.  deprecated  the  civilization  of  the  times  as 
tending  to  great  cities ;  and  that  intemperance  and 
crime,  prostitution,  and  all  those  kindred  evils,  are 
the  inevitable  results  of  poverty.  A  wealthy  individ- 
ual devoted  a  small  portion  of  seventy  millions  to 
alleviate  the  unhappy  condition  of  tlie  working 
women  of  New  York,  which  deserved  praise,  but  at 
the  same  time,  it  was  a  crying  shame  upon  the  civil- 
ization that  made  it  necessary.  The  brains  of  the 
nation  are  what  is  wanted  to  deal  with  this  problem. 
The  present  is  the  age  in  which  great  problems  of 
industry  are  to  be  examined," 


m 


HP 


16 


BKNSALKM  ;     OK, 


t^f 


I    11 


A  writer  in  tlio  Fortnightly  Review  asks : 
**  What,  in  few  words,  is  this  problem  of  capital  and 
labor  ?  And  answers  it  is  tliis  :  In  this  complex 
industrial  system  wealth  has  discovered  the  mach- 
inery by  which  the  principal, in  some  cases  the  whole 
results  of  common  labor  become  its  special  per- 
quisites. Ten  thousand  miners  delve  and  toil,  giv- 
ing their  labor  and  risking  their  lives ;  ten  masters 
give  their  direction  and  the  capital,  oftenest  only  the 
latter ;  and  in  a  generation  the  capitalists  are  rioting 
in  vast  fortunes,  and  ten  thousand  workmen  are  rot- 
ting in  their  graves,  or  are  in  the  workhouse.  And 
yet  the  ten  thousand  are,  at  least,  as  necessary  to  the 
work  as  the  ten,  and  more  so.  The  ten  capitalists 
are  practically  the  law  makers ;  the  magistrates  the 
governors,  the  educators  of  them.  The  priests  of 
all  creeds  are  their  creatures.  Practically,  they 
make  and  interpret  the  law — the  law  of  the  land,  the 
law  of  opinion,  and  the  law  of  God.  They  are 
masters  of  the  whole  social  forces.  The  whole  social 
force  is  directed  for  the  benefit,  not  of  those  who 
want,  but  of  those  who  have.  Habituall}',  uncon- 
sciously often  with  what  they  think  a  religious  sense 
of  duty,  they  work  the  machine  of  society  for  their 
own  objects.  Luxuries  are  wrung  out  of  the 
peasant,  who  lives  like  a  beast  of  burden  and  dies 
like  a  dog  in  a  ditch.  Whilst  the  capitalist  is  court- 
ing society  for  a  peerage,  a  thousand  lives  of  seamen 
are  lost,  decoyed  in  rotten  ships  to  sea.  Whilst 
millionaires  can  still  paralyze  the  legislature,  a  thou- 
sand lives  are  lost  each  year  in  pits.  And  whilst 
fortunes  are  reared  by  iron  masters,  a  hundred  thou- 


THE     NEW     ECONOMY. 


17 


sand  are  ground  to  the  dust  by  truck.  A  hundred 
thousand  families  are  cheated,  insulted,  and  oppressed 
by  being  forced  to  barter  portions  of  their  wages  for 
some  fraudulent  equivalent  in  goods ;  whilst  the 
laborers  are  as  worthy  of  the  profits  as  the  capitalists. 
The  system  by  which  the  gross  result  is  appropriated 
by  capital,  and  under  which  the  self-indulgence  of 
wealth  soars  to  unimagined  heights,  whilst  the  area  of 
misery,  ignorance,  and  exhaustion  sinks  even  deeper, 
is  a  system  which  is  doomed  to  end.  The  claim  of 
capital  to  amass  wealth  by  whatever  means  it  chooses, 
and  to  spend  it  how  and  when  it  pleases,  is  so  vile  ; 
the  claim  of  the  workman  to  have  his  part  in  the 
social  result  is  so  unanswerable,  that  the  end  and 
issue  is  not  doubtful." 

It  is  estimated,  on  trustworthy  grounds,  that 
there  are  not  less  than  100,000  children,  of  both 
sexes,  at  work  in  the  factories  of  New  York.  They 
are  employed  making  envelopes,  boxes,  gold  leaf, 
collars,  artificial  flowers,  tobacco,  etc.  Their  ages 
range  from  five  to  sixteen  years ;  having  no  chance 
of  education.  In  many  cases  they  perform  as  much 
work  as  adults,  and  for  but  a  fraction  of  their  pay  ; 
although  their  daily  toil  is  both  intense  and  wearying. 
They  live  mainly  in  cellars,  and  damp  and  unhealthy 
places ;  in  consequence,  they  become  stunted  in  body 
and  mind.  There  are  60,000  persons  in  that  city 
who  can  neither  read  nor  write. 


^ 


"•-^ 


THE  SOLUTION  OP  THE  CAPITAL  AND  L\B01l  QUESTION 
INVOLVED  IN  THE  RATE  OF  INTEREST. 

V. — In  tlio  foregoing  pages  you  Iiavc  the  picture 
of  u  civilization  wliich  suggests  the  gravest  reflec- 
tions ;  not  a  feature  indicating  eitiier  government  or 
economy.  All  the  advantages  which  go  towards 
making  life  deurable  are  conferred  upon  the  few — 
the  ])osses8or8  of  wealth  and  luxury;  whilst  the  poor, 
the  weak,  the  immature,  the  infantile — a  too  large 
number — are  ground  to  the  dust.  One  fails  to 
detect  either  care  or  economy  on  the  part  of  govern- 
ments or  statesmen,  where  there  is  such  contempt 
for  human  happiness,  and  such  waste  of  human  life. 
The  spectacle  is  one  of  imdist^nbuted  capital;  and 
nowhere  is  it  carried  to  such  a  disastrous  extent  as- 
in  large  cities.  The  centralizing  power  of  capital 
build  cities,  which  serve  to  aggrandize  the  few  at 
the  expense  of  the  many  who  are  doomed  to  suffer- 
keenly  all  the  evils  attendant  upon  degrading  pov- 
erty. If  political  economists  have  aided  in  the 
slightest  degree  the  increase  of  national  wealth,  let 
them  have  the  credit  of  it.  But  one  thing  is  certain; 
they  have  failed  to  originate  a  single  principle  wor- 
thy of  the  name  of  economy,  since  that  wealth 
remains  undistributed,  and  whilst  the  sum  of  misery 
arising  theretrom  remains  intact. 


THE     NEW     ECOKOMY. 


ii) 


W. — IJn(li8tril)ut(3(l  woiiUli  Iuih  been  tlie  Btunding 
compliiiiit  of  tlie  French  people  ever  sinee  the 
Kevohition  of  '89.  This  nution  is  keenly  sensitive 
above  all  others  of  the  privileges  of  ea)>'tHl;  but  we 
see  with  what  sueeess  it  has  more  th;.ii  once  at- 
tempted to  establish  a  social  equality,  or  anything 
like  equahty  of  property.  Am  I  to  understand  that 
you  justify  the  poorer  classes  laying  lumds  upon  the 
property  of  more  fortunate  neighbors,  and  dividing 
it  amongst  themselves  ? 

jT". — It  is  a  notorious  fact  that  the  legislation  of 
natioiiis  hitherto  has  been  almost  wholly  without  a 
guiding  principle.  It  is  a  truism  that  the  glorious 
constitution  of  Great  Britain  itself  is  but  an  elaborate 
tissue  of  expedients,  exclusive  of  any  general  intel- 
ligible law.  The  French  Revolution,  under  the 
guidance  of  Robespiere,  went  in  for  a  radical  over- 
turning of  a  society  which  had  been  assiduously 
built  up  upon  a  similar  laisser  faire  expediency 
during  a  period  of  eight  hundred  years.  "  It  swept 
away  the  anient  monarchy  whose  traditional  policy 
(another  name  for  expediency)  had  created  the  king- 
dom ;  a  national  church  ;  a  tenure  of  land  whi(;h 
maintained  a  valiant  nobility;  it  confiscated  all 
endowments,  and  abolished  all  corporations  ;  erased 
from  the  map  of  the  soil  all  the  ancient  divisions, 
and  changed  the  land  marks  and  the  very  names  of 
the  country  ;  it  entirely  effected  its  purpose,  which 
was  avowedly  to  destroy  all  the  existing  social  ele- 
ments, and  level  the  past  to  the  dust."  That  was  a 
reconstruction  of  society  upon  a  magnificent  scale, 
but  as  purely  arbitrary  and  tyrannical  in  its  spirit  as 


I 


w^ 


tr*; ' 


I 


I J 


20 


BEN8ALEM  ;     OB, 


tlie  civilization  it  had  blotted  out.  Property,  and  all 
the  good  things  of  France,  were  equally  divided  ;  but 
how  long  did  this  disposition  of  property  hold  ? 
Since  that  period  there  have  existed  the  Empire, 
theT  the  Bourbons,  after  that  tlie  second  Empire  of 
Napoleon,  and  now  the  Republic  again.  It  is  but 
yesterday  the  Commune  of  Paris  clamoured  in  utter 
despair  for  a  re-division  of  the  propci'ty  of  their  un- 
happy countiy.  The  United  States,  when  it  got  rid 
of  tlie  traditionary  policy  of  Great  Britain,  it  com- 
menced with  a  clean  slate,  and  a  constitution  which 
was  supposed  all  but  perfect ;  but  what  has  been  the 
hiistoiy  of  tliat  nation,  and  wherein  has  its  legislation 
differed  from  that  of  its  predecessors  in  history  2 
The  rights  imd  liberties  of  the  citizen  have  been  all 
but  neutralized  by  wr  jtched  expedients  of  laws  re- 
garding property  ;  so  that  a  monied  man  may  do 
what  he  pleases  with  impunity  in  all  the  more  intel- 
ligent communities  of  the  period.  Such  a  division 
of  property  ao  tt  ok  place  in  '90,  it  is  impossible  to 
justify,  and  must  be  looked  upon  as  an  outrage  upon 
civilization.  Every  arbitrary  act,  and  every  un- 
righteous division  of  property  will  come  back  upon 
the  perpetrators.  .  But  it  does  not  follow  that  if 
arbitrary  or  class  legislation  lias  failed  to  do  justice 
to  the  working  man,  that  there  are  not  obstructions 
to  be  removed  from  tlie  field  6i'  labor,  and  rights  to 
be  recognized  which  have  hitherto  been  ignored. 

ir.— Do  you  affirm  that  the  field  of  industi-y  is  W'' 
free  to  all  who  have  a  KMud,  by  diligence  and  econ- 
omy, to  acquire  a  coinpetency  'i      If  per3ons  fail  of 
success  in  a  free  country,  is  it  not  their  own   fault  I 


THE     NEW     ECONOMY. 


21 


.\JC 


And  sliould  not  the  idle  and  improvident  suffer  the 
(consequences  of  their  folly  ? 

V. — I  am  aware  that  persons  fail  of  su'jcess  from 
persona)  vices  and  unsteady  habits;  but  these  causes 
are  inadequate  to  account  for  the  general  failure. 
Men  in  general  are,  as  a  rule,  steady  and  industrious; 
yet  they  fail  of  a  desirable  and  satisfactory  result. 
Statistics  and  history  corroborate  what  I  say.  Is  it 
not  a  fact,  that  in  business  there  are  niuefcv-nine 
blanks  to  the  hundred  chances^  If  one  field  pro- 
duces a  good  crop  of  wheat,  and  another  a  poor  one, 
from  the  same  seed,  must  not  the  conditions  answer 
for  the  difference  ?  I  argue,  therefore,  there  must 
be  a  general  cause  operating  against  Llie  elevation  of 
the  laborer. 

W. — The  problem  is  a  difficult  one,  and  little,  as 
yet,  has  been  done  towards  its  solution.  Praise- 
worthy as  have  been  the  efforts  of  Messrs.  Hughes, 
Harrison,  Arch,  Goldwin  Smith,  and  others,  they 
have  failed,  by  union  and  co-operative  measures,  to 
do  more  than  effect  a  better  understand  in  2;  between 
master  and  man.  They  now  discover  the  futility  of 
attempting  to  alter  a  law  of  nature ;  or,  in  other 
words,  to  neutralize  the  influenceof  the  labor  market 
on  prices  of  manufactures.  Thanks  are,  however, 
due  for  the  agitation  they  have  caused  on  the  labor 
question. 

V. — It  is  very  evident  that  the  question  now 
agitating  civilization  is  not  merely  a  quarrel  between 
master  and  men,  but  a  question  of  deeper  import — 
that  of  the  distril)ution  of  capital.  An  analysis  of 
industry  will  lay  bare  the  fact,  that  in  every  produc- 


-4 


22 


BENSALEM ;     OK, 


ing    and    manufacturing    enterprise,    interest     for 
capital  employed  must  first  be  deducted  from  the 
gross  earnings  before  an  employer  can  decide  what 
wages  should  be  paid  for  labor,  and  before  he  can 
ascertain  his  own  profits ;    the  torm  capital  being 
understood  to  stand  for  ar.d  cover  money,   tools, 
rent,  etc. — all,  in  fact,  tliat  goes  to  makr  up  that 
sum  of  facilities  which  the  employer  is  supposed  to 
control,  '^'^art  from  the  active  labor  engaged.     Inter- 
est, therefore,  on  the  sum  of  those  facilities,  must,  it 
is  very  obvious,  always  come  in  as  a  first  charge 
upon  the  results  of  labor ;    before  either  wages  or 
profits  can  be  apportioned.     If  interest  is  high,  the 
less  will  be  the  profit ;  if  low,  tlie  greater  the  sum 
to  be  divided.     This  narrows   down  the   question, 
you  see,  to  a  matter  of  interest  for  capital — a  very 
different  question  from  that  which  has  been  so  much 
agitated,   without   almost    any   appreciable    result. 
Evidently,  the  labor  agitatior.  has  never  questioned 
the  rights  of  capital,  as  they  are  now  maintained, 
in  charging  such  high  interest.     The  rights  of  the 
capitalist  indeed  have  been   questioned   enough — 
meaning  by  that  term  the  employer  of  labor — for- 
getting  that    an    employer    is    not    necessarily    a 
capitalist.      It    is    plain,    however,    the    necessary 
element  of  capital  has  rights  of  its  own;  and  distinct 
from  those  of  the  employer  and  employee.      But 
agitators  have  failed  to  do  justice  to  the  labor  move- 
ment, because  they  have  admitted  the  right  of  the 
capitalist  to  a  high  rate  of  interest  being  deducted, 
before   wages   or   profits   should    be    apportioned. 
Admit  the  justice  of  a  high  rate  of  interest,  and   it 


THE    NEW     ECONOMY. 


23 


is  impossible  by  legisla'ioii  to  improve  tlie  coiuiitiou 
of  the  laborer.  On  tlie  contrary,  neutralize  interest; 
and  to  that  extent  you  place  the  working  man  on 
the  scale  of  his  merits — ^you  do  him  justice.  His 
skill  and  diligence  is  fully  rewarded. 

W. — But  if  you  blot  out  interest,  don't  you  anni- 
hilate capital  ? 

V. — By  no  means.  Blot  out  capital,  and  you 
deprive  industry  of  its  greatest  support — its  neces- 
sary aid.  Cancel  interest  merely,  and  you  not  only 
leave  capital  in  full  power  and  usefulness,  but  you 
divert  its  profits  from  the  capitalist  to  the  laborer  ; 
that  is  to  say,  you  distribute  capital.  But  allow  me 
to  illustrate  what  I  mean  by  the  interference  of  capi- 
tal with  labor  when  a  high  rate  of  interest  prevails, 
or  say  even  at  the  current  rate  in  the  Dominion — 
ten  per  cent.  An  individual  possessing,  say  $10,000, 
let  out  at  the  curvent  rate,  compound  interest,  it 
would  double  in  about  seven  j  ears ;  and  in  about 
sixteen  years  it  would  increase  five  fold  nearly — add- 
ing principal  and  interest  together.  Tlie  $10,000 
would  become  nearly  $50,000.  This  result  Avould 
be  accomplished,  though  the  possessor  whiled  away 
his  time  in  idleness,  providing  he  employed  a  broker, 
which  he  could  do  at  a  slight  commission.  Now  the 
question  is  by  what  means  was  the  $10,000  increased 
to  $50,000  ?  Obviously,  by  the  skill  and  industry 
of  an  army  of  laborers,  who  merely  made  wages  out 
of  the  enterprise.  But  the  $40,000  of  increase, 
nearly  all,  went  into  the  pocket  of  the  capitalist,  who 
did  not  trouble  his  head  or  hand  in  the  operation. 
The  skilful  laborers  had  no  share  of  the  increase, 
A  2 


24 


bemsalem;   or, 


which  they  were  the  active  agents  in  -naking.  Nay, 
more  :  at  tlie  end  of  that  period,  the  workmen  were 
possibly  in  a  worse  condition,  financially,  than  at  the 
commencement ;  having  families  they  could  barely 
feed  and  clothe,  and  their  children  having  to  be 
educated  at  the  expense  of  their  neighbor's  property ! 
It  is  obvious,  tl'crefore,  that  if  in  a  self-sustaining 
community  money  should  be  liad  at  or  near  cost, 
then  tlie  whole  of  the  $40,000  of  increase  would 
go  into  different  pockets — those  of  the  rightful  own- 
ers who  uuidc  it.  What  a  comment  upon  popular 
ideas  ot  economy  !  Is  this  not  the  manner  in  which 
the  rich  bee  ome  richer  and  the  poor  poorer  ?  That 
$40,000  inc"3ates  the  fearful  odds  against  the  work- 


ing man. 


I 


W. — But  has  capital  no  rights  ?  How  could  men 
got  employment  without  it  ? 

V. — You  err  in  supposing  that  any  less  capital 
would  offer  for  employment  at  a  low  rate  of  interest. 
On  i]ie  contrary,  the  profits  of  capital  being  distrib- 
uted, v'ould  give  an  increased  motive  to  exertion. 

W. — Then,  in  order  to  relieve  industry,  you 
would  reduce  the  rate  of  interest  ? 

V. — Plainly,  that  is  the  point.  The  working 
men  of  Canada  and  every  other  country  feel  they 
don't  get  a  fair  share  of  the  results  of  industry ;  but 
how  this  happens  they  cannot  well  define.  Yet  all 
the  trades  are  agitated  in  consequence  of  the  mani- 
fest injustice.  The  cause  is  very  obvious,  and  inheres 
solely  in  the  rate  of  interest.  If  you  capcel  interest, 
nothing  can  prevent  the  laborer,  if  he  chooses,  get- 
ting the  full  reward  of  his  intelligence,  skill  and 


i!i 


THE     NEW    ECONOMY. 


26 


diligence.      Every  legal  disability  will  be  removed 
from  his  patli. 

IF. — How  would  you  reduce  interest  ?  By  a 
usury  Jaw  ? 

V. — As  well  atteuT't  to  alter  the  price  of  bread 
or  beef  by  sucli   means.     Money,  which  is  now  a? 
monopoly,  must  be  phiced  upon  the  same  footing  as 
commodities,   subject  to    the  laws   of    supply  and 
demand,  free  manufacture  and  a  free  market. 

W. — Is  it  not  so  now  ?  You  certainly  err  in 
supposing  our  Banking  law  not  free,  sin(;e  any  num- 
ber of  banks  may  start  business. 

V. — We  shall  discuss  that  presently  ;  but  allow 
me  to  remark  that,  inasmuch  as  the  law  is  partial  and 
does  not  cover  all  the  property  available  as  money, 
in  this  sense  it  is  a  monopoly. 

W. — Would  not  a  reduction  of  the  rate  of  inter- 
est detracit  from  the  utility  of  capital  ? 

V. — You  surprise  me.  It  would  be  as  wise  of 
you  to  inquire  if  the  higher  the  rate  would  not  en- 
hance the  value  of  money  ?  But  it  is  self-evident 
the  more  interest  paid  the  less  capital  is  at  the  com- 
mand of  the  borrower.  And  if  the  rate  of  interest 
should  decline,  it  does  not  follow  that  the  principal 
should  fall  below  par. 

W. — But  would  a  decline  in  the  rate  not  check 
enterprise  ? 

V. —  On  the  contrary,  it  would  stimulate  industry. 
Because  capital  would  be  forced  into  active  employ- 
ment to  turn  it  to  advantage.  A  legitimate  and 
steady  reduction  would  accomplish  two  objects :  it 
would  deprive  money  of  all    of   its   objectionable 


^^f~ 


■^^^il 


26 


BENSALEM  ;     OR, 


!  r 


qualities,  and  leave  with  it  all  tliat  is  desirable  and 
useful.  And  it  would  prevent  the  ca])italist  appro- 
priating more  than  his  share  of  the  profits  of  indus- 
try ;  it  would  distribiite  capital. 

W. — Now  I  perceive  wherein  your  use  of  the 
phrase  "distribution  of  capital"  differs  from  the 
sense  attributed  to  the  Communists.  You  refrain, 
even  by  law,  to  interfere  with  vested  rights,  and  leave 
the  owner  in  full  possession  of  his  property  ;  but 
you  prevent  those  possessions  being  doubled  and 
quadrupled  by  exhorbitant  interest.  In  fact,  you 
prevent,  as  much  as  possible,  the  increase  of  capital, 
except  by  active  industry.  On  the  other  hand,  the 
condition  of  the  -working  man  is  improved  to  the 
extent  that  interest  is  reduced  by  adding  to  wages — 
placing  him  on  a  par,  to  some  extent,  with  the  pos- 
sessor of  wealth  ;  inasmuch  as  his  skill  and  activity 
are  fully  rewarded.  Again,  competition  with  you  is 
unchecked,  affording  the  indolent  and  improvident 
no  protection — all  being  placed  on  their  merits. 

Y. — And  this  result,  you  perceive,  I  bring  about 
by  the  recognition  of  rights  hitherto  ignored,  the 
right  of  the  best  securities  being  monetized. 

W. — That  is:  you  bring  to  the  aid  of  productive 
and  manufacturing  industry,  the  capital  of  the  landed 
interest,  giving  the  owners  of  tlie  best  securities  the 
p3wer  of  issuing  money — a  policy  the  very  opposite 
to  what  agitators  on  the  labor  movement  have  pur- 
sued, as  they  have  persistently  and  moot  unnaturally 
arrayed  the  interests  of  labor  and  property  against 
each  other.  « 

Y. — That  arises  from  the  friends  of  the  work- 


THE    NEW     ECONOMY. 


27 


ing  man  failing  to  perceive  the  mutual  helpfulness  of 
all  classes  of  industry  to  each  other,  which  a  just 
legislation  brings  into  play.  Let  there  be  placed 
upon  the  statute  book  an  adequate  general  property 
law,  as  suggested,  and  it  would  at  once  wipe  out  the 
thousand  and  one  arbitrary  expedients,  which  have 
served  so  long  to  degrade  the  industrial  classes,  and 
do  justice  to  all.  It  is  the  saying  of  a  modern  pliil- 
•osopher  that  "property  keeps  the  accounts  of  the 
world,"  but  I  say  it  does  not  yet  keep  them  co/rectly. 
What  do  you  suppose  the  effect  would  be  to  society, 
of  a  reduction  of  the  rate  of  interest,  say  to  the 
cost  price  of  money? 

W. — I  cannot  pretend  to  predict.  What  say 
you? 

V. — Were  I  to  particularize,  I  should  hazard 
my  reputation  for  veracity;  but  I  may  say  it  would 
place  commerce  upon  a  basis  of  justice;  the  rest  I 
shall  leave  you  to  imagine. 

W. — Your  ideas  will  be  stigmatized  as  Utopian. 

V. — One  may  well  afford  to  bear  the  slander 
when,  doubtless,  an  enlightened  self-interest  will  duly 
enforce  their  realization.  But  if  the  epithet  Utopian 
means  justice,  I  have  no  objections  to  it.  A  citizen 
from  my  country  knowing  tlie  high  rate  of  interest 
prevalent  here,  could  have  predicted  the  unhappy 
condition  of  the  laboring  classes.  England,  in  this 
particular,  might  be  thought  somewhat  exceptional, 
as  there  a  lower  rate  of  interest  prevails,  whilst  the 
industrial  classes  are  fearfully  degraded.  But,  there 
the  favorable  finances  are  more  than  compensated 
by  the  high  price  of  food.     It  must  be  remembered 


r 


!  } 


og  bensalem;  OB, 

the  position  of  Great  Britain  is  anomalons,  in  eon- 
leleLe  of  Ixer  great  manufacturing  po,yer  sup- 
pSbyalimiteS  agriculture.     To  any  one  who 
Si  considers  the  subject,  a  donbt  must  ar^e 
Tto  the  permanency  of  manufaet,mng  supremacy, 
Z  a  nation  so  situated.    For,  other  thmgs  being 
enuaClse  countries  in  possession  of  a  favorable 
rll  climate  must,  ere  long,  assume  the  ead ;  as 
mach  nery  may  either  be  invented  or  imported,  and 
Ty  people  »4  be  ^''"''^  '"  manufactunng  sUl 
^  T-Have  you  not  exaggerated  tbe  current  rate 
of  interest? 


BUILDING  AND  LOAN  SOCIETIES. 

Y.—l  speak  of  your  institutions  from  wliat  ap- 
pears in  the  press.     I  am  not  acquainted  with  any 
loan   society  that  charges  less  than  ten  per  cent. 
And  many  charge  a  great  deal  more  than  they  would 
have  people  believe.     I  have  before  me  the  report 
of  one  of  these  Loan  and  Building  Societies,  pro- 
fessing to  be  of  the  more  respectable   of  its  class ; 
and  purporting  to  have  a  capital  of   a   million    of 
dollars.     It  shows  investments  in  4:5-i2  mortgages  of 
value  $2,859,760.     The  cash  receipts  for  1872  were 
$1,382,019,  of  which  $817,440  were  received  from 
mortgages  as  repayment  in  advance. 

From  the   memoranda  published,  showing   the 
rate  of  interest  charged  on  loans,  and   the  manner 
of  computation,    I   take   the   following    examples: 
The  borrower  of  a  $1,000  for  ten  years,  payable  in 
instalments  of  $76.90  at  the  end  of  every  succeed- 
ing six  months,  liquidating  principal   and   interest. 
This  loan  is  affirmed  by  the  society  to  be  less  than 
eight  per  cent,  per  annum.     It  commences  by  charg- 
ing «.ight  per  cent,  for  six  months  on  the   $1,000, 
which  is  $40,  and  this  charge  is  cotitinued  through- 
out  the   twenty   half-yea  -ly   payments— each   time 
deducting  $40  interest,  as  if  the  whole  $1,000  were 
still  in  the  hands  of  the  borrower;  when,  manifestly, 


i  I 


ii 


30 


bensalem;   or, 


it  has  changed  hands  and  gone  into  the  sinking  fund 
of  the  society.  This  they  call  the  Credit  Foncier 
principle  of  computing  interest — a  most  ingenious 
contrivance  to  increase  profits  by  collecting  interest 
upon  a  principal  which  has  gradually  disappeared 
from  the  pocket  of  the  hapless  borrower  and  gone 
to  augment  the  sinking  fund.  So,  upon  the  pretence 
of  charging  less  tlmn  eight  per  cent.,  they  knowingly 
collect  more  than  ten  per  cent,  per  annum.  Another 
instance  of  a  $1,000  for  twenty  years,  payable  in 
instalments  of  $111.20  yearly,  the  money  costs  over 
eleven  and  a  half  per  cent. !  The  president,  in  his 
report,  curiously  enough  deprecates  tlie  rapid  in- 
crease of  similar  societies,  and,  likely,  to  an  extent 
beyond  the  capacity  of  the  coimtry  to  maintain. 
In  which  fear  I  perfectly  concur,  as  they  are  crop- 
ping out  in  every  town  and  village ;  and  appro- 
priating all  the  landed  securities  tliey  can  lay  their 
hands  upon  under  similar  pretences. 

W. — The  aggregate  annual  interest  in  this  com- 
munity amounts  to  many  millions  of  dollars,  taken 
from  the  industrial  classes  and  transferred  to  the 
capitalist,  in  obedience  to  an  unjust  legislation,  you 
would  say? 


CANA.DIAN   BANKING   AND  MERCANTILE  AGENCIES. 

];^.__Ccrtainly ;    your  banking  law  is   at  fault, 
when  it  serves  as  a  protection  to  the  merciless  usurer. 
We  hear  this  is  an  aj^e  of  inquiry,  in  which  the  opin- 
ions of  the  gravest  philosophers  are  hardly  safe;^  and 
the  most  sacred  recesses  of  both    Churcli  and  State 
are  turned  inside  out.      True  it  is  but  yesterday  the 
infaUibility  of  the  Pope  became  a  luirmless  exploded 
dogma.     Such  violent  changes,  I  confess,    are    not 
thought    agreeable;    nevertheless,   imnninity   from 
criticism  on  the  part  of  any  public  institution  is  of 
itself  a  source  of  weakness  rather  than  of   strength, 
and  a  presumption  of  unfitness  for  the  place  it  occu- 
pies  in  a  progressive   civilization.       In    a  country 
blessed  with  free  institutions  and  a  free  press,  it  is 
the  conceded   right  of  the  humblest  citizen  to  ask 
questions  of  public  interest,  without  suffering  humil- 
iating apologies  for  the   exercise  of  it,  because   it 
•contributes  to  a  healthy  public  opinion.     I  may  be 
allowed,  therefore,  to  inquire  what  is  a  bank  bill  ?— 
a  simple  enough  question,  yet  deserving  a  reply. 

W.—lt  is,  plainly,  so  much  money— a  dollar. 

V. — I  regard  it  differently. 

ir. It  will  buy  what  I  please  to  that  extent. 

Y. It  is  but  a  promise  to  pay  ;  and  would   it 

not  be  more  proper  to  say  the   holder  has  parted 
with  a  dollar  for  it  ? 


82  BENSALEM  ;     OR, 

]V. — T1j(3I1  the  banker  lias  got  tlie  money,  and  I 
the  promise  ? 

V. — It  appears  so. 

W. — Tliat  is  strange,  I  confess.  But  cannot  I 
get  gold  for  it? 

V. — I  musr,  refer  you  to  a  monthly  bank  state- 
ment ;  any  one  will  do  'i 

Statement  ok  Banks  in  Ontabio  and   Quebec    acting  undeb 

CHARTEB   fob   the   month    ending  JaNUABT,   lH7a,  ACCOBDINO 

to  the  betubn8  pubnihhed  by  them  to  the  auditob  of 
Public  Accounts. 

Capital,  paid  up ^48, 554, 114  OS 

LiaHUtien. 

Notes  in  circulation f24,4!>l,384  00 

Govoninient  (lepoHits,  on  demand...     M,488,l(!7  5)1 

Other  deposits,  on  demand 28, L'.')!), 437  7.5 

Deposits  payable  after  notice 2.5,()(;8,12!)  40 

• !|81,307,119  06 

Other  liabilities 3,491,043  r*2 

Specie i|.5.S)43,418  83 

Dominion  notes 8,164,251  95 

.tl4,107,670  78 

Notes  and  bills  discounted 107,028,031  68 

Other  assets 25,842,185  21 

V. — The  above  items  I  divide  into  two  classes  : 
Those  that  refer  to  the  issues  which  are  public  pro- 
perty ;  the  other  items  concern  the  private  businesa 
of  the  banks.  Speaking  advisedly,  thoprivate  busi- 
ness cannot  be  estimtiod  by  the  public.  Bankers, 
in  fact,  would  require  to  be  something  more  than 
human,  to  publish  statements  of  their  affairs  that 
might  prejudice  their  interests.  How  should  they 
be  expected  to  exaggerate  their  debts,  or  undervalue 
their  assets  ?     But  is  it  not  cruel  to  insist  upon  per- 


THE     NEW     FX'ONOMY. 


33 


sons  of  education  and  refinement  discharf^ing  so 
delicate  a  trust — one  bo  intimutely  effecting  their 
honor  as  the  publisliing  of  private  business  ?  Pra}', 
does  tlie  good  auditor  never  thinic  of  this? 

W. — It  does  appear  an  almost  impossible  duty> 
I  must  say. 

Y. — The  issue  department  represents  deposits 
and  circulation,  all  payable  on  demand,  with  the  ex- 
exception    of  twenty-iive   millions,  at   fifteen    days' 

notice $81,30T,111> 

Assets  available ;  gold  and  l)om. notes. .    14,107,070 

$67,199,44» 

W. — "What  of  tliis  deficiency  ? 

Y. — I  cannot  say,  unless  the  private  business  is 
chargeable  with  it.  If  so,  to  that  extent  is  the  circu- 
lation imperiled  by  ordinary  transactions.  I  remark, 
capital  is  small  compared  with  loans  and  investments. 

IV. — That  is  accounted  for,  I  suppose,  by  the 
issue  of  bills  to  double  the  extent  of  the  capital,  in 
discounting.  A  large  quantity  of  the  notes  remain 
in  circulation,  but  the  greater  part  return  as 
deposits,  which  again  are  loaned. 

Y. — Deposits  are,  therefore,  of  the  same  liability 
as  circulation,  payable  on  demand,  in  gold  'i 

W. — Our  writers  on  banking  are  not  so  exacting. 

V. — Wherein  is  the  difference?  Deposits  in 
ordinary  banks  are  not  so  liable,  I  grant ;  but  it 
must  be  so  with  banks  of  issue. 

W. — You  are  not  so  unreasonable  as  to  expect 
immediate  payment,  however  ? 

Y. — Then  what  guarantee  has  the  creditor? 


34 


BKNSALEM  ;     OE, 


i  H I 


if"' 


W. — Tlie  Dominion  notes  are  the  only  tangible 
security ;  but  Canadian  banks  have  generally  met 
their  liabilities. 

V. — It  is  not  wliat  banks  may  choose  to  do  rather 
than  forfeit  their  credit,  but  what  they  may  be  com- 
pelled to  in  case  of  necessity,  that  should  be  satis- 
factory to  the  public. 

TF. — Were  they  bound  to  give  security,  it  would 
-contract  their  privileges. 

V. — If  it  would  i-uin  them  to  do  so,  how  do  they 
claim  being  so  very  lielpful  to  industry  ? 

W. — By  their  credit,  I  suppose. 

V. — Ordinary  transactions  in  business  may  be 
conditioned  in  any  way  tlie  parties  please  ;  but  legis- 
lation on  a  currency  should,  at  least,  satisfy  the 
creditor,  should  it  not  ? 

W. — That  appears  icasonable. 

T^. —  From  what  source  do  ministers  of  a  free 
country  acquire  the  power  to  legislate  tiic  money  out 
of  people's  pockets,  and  hand  over  tlieir  interests  to 
companies  who  cannot  Live  a  fjuidpro  qiiof  Eut, 
tell  me,  do  bankers  practice  wliat  they  preach  %  Do 
they  loan  -vvithout  getting  security  ?  If  Jones,  when 
he  applies  for  discount,  has  to  give  an  endorser,  is 
he  not  entitled  to  ask  a  similar  favor  in  return  % 

IF. — So  far  from  a  customer  suggesting  such  a 
favor  he  has  rarely  sufficient  stiffness  left,  after  part- 
ing with  name,  endorser,  warehouse  receipt,  bills  of 
lading,  etc.  Would  you  believe  it  that  merchant  is 
anotlier  name  for  clay  in  tlie  hands  of  the  banker 
of  the  period  ? 


THE    NEW    ECONOMY. 


35 


V. — Yon  astound  me.  But  that  eighty-one 
millions,  is  it  not  somvch  borrowed  from  the  ]>ublic? 

W. — That  cannot  be  denied. 

V. — Well,  what  interest  is  allowed? 

W. — It  appears  that  twenty-five  of  it,  only,  col- 
lects interest,  and  at  four  per  cent.  If  bankers  pay 
interest,  they  say  they  cannot  pay  dividends.  Is  that 
not  satisfactory  ? 

V. — What  do  they  make  out  of  their  customers?" 

W. — I  am  informed:  nine  per  c jnt.  on  discounts ;. 
five  on  currency ;  four  on  deposits,  and  enough  more 
on  commissions  to  make  up  25  or  30  per  cent,  on 
their  capital. 

V. — Then  the}'  neither  pretend  to  give  interest 
nor  security  ? 

W. — It  appears  not. 

V. —  But  let  us  return  to  the  line  of  discounts. 
It  is  one  of  those  items  of  private  business  I  Iiad 
rather  decline  remarking  upon,  but  it  is  pressed  inio 
notice  by  the  bankers  themselves.  The  circulation, 
and  I  might  say  the  commerce  of  the  country,  mainly 
rests  on  the  value  of  this  item — uj)on  personal  secur- 
ity ;  and  yet  how  difficult  it  is  to  estimate  it.  I 
question  if  a  banker  even  could  do  it  justice.  These 
considerations  occur :  AV^hat  part  represents  real 
transactions,  and  what  not ;  and  wliat  part  renewals? 
Then  again,  transactions  may  be  real,  but  the  stand- 
ing of  tlie  parties  dubious;  and  does  any  part  rt^pre- 
sent  stock  ?  It  nmst  be  taken  at  the  estimate  of  the 
banker  and  his  irresponsible  agents,  after  alh 

IF. — Softly,  my  friend,  allow  me  to  inform  you 
that  the  value  of  a  promissory  note  is   not   left   to- 


^•51 


36 


BENSALEM  ;     OE, 


the  judgment  of  eitlier  the  directors  or  manager. 
There  exists  an  institution  whicjh  comes  to  tJjeir  aid 
in  the  arduous  duty  of  rating  the  credit  of  business 
firms ;  and  that  is  styled  tl\e  Mercantile  Agency — 
an  institution,!  dare  say, you  are  in  blissful  ignorance 
of  in  your  felicitious  Isle.  This  concern  is  tlie  out- 
growth of  the  credit  system;  and  is  peculiar  to  the 
refined  economy  of  the  period.  You  will  say  so 
wlien  you  learn  it  diflfers  it  its  spirit  and  genius  from 
every  other  lawful  business.  The  familiar  old  adage, 
^'  Let  every  man  mind  his  own  business,"  is  not  found 
in  the  vocabulary  of  this  institution,  whose  mission 
is  to  look  after  the  business  of  other  jp^ople.  It  is 
assumed  tliis  system  of  espiofiage  is  peculiarly  help- 
ful to  the  banker,  since  he  pays  such  large  sums  for 
its  information.  No  sooner  is  a  note  discounted  thf/i 
.a  spy  is  set  over  the  customer  to  watch  every  use 
that  is  made  of  the  money ;  and  a  favorable  report 
is  looked  for  with  anxiety.  So,  you  see,  holders  of 
bank  notes  don't  run  much  risk  after  all- 

V. — Ah,  that  indeed  is  information  to  a  citizen 
of  Bensalem,  and  places  your  banking  system  in  an 
entirely  new  and  interesting  light,  since  the  value  of 
the  circulation  must  be  taken  at  the  estimate  of  the 
mercantile  agency.  But  may  I  be  allowed  to  make 
A  suggestion  ?  As  your  people  have  so  much  faith 
in  wliat  debtors  say  of  their  liabilities,  would  it  n(>t 
be  an  improvement  upon  that  cumbrous  detective 
machinery  you  have  explained,  to  have  an  act  placed 
upon  tlie  statute  book  requiring  the  grocer,  the 
haberdasher,  the  merchant,  mechanic,  and  inanufac- 
lurer  of  every  line  of  industry,  to  furnish  a  monthly 


I 
i 


THE     NEW     ECONOMY. 


37 


statement,  similar  to  that  of  the  banker,  of  the  state 
of  their  business,  for  publication  in  the  JDominion 
Gazette^  and  lieaded  "  According  to  the  returns  fur- 
nished by  them  to  the  Auditor  of  Pubhc  Accounts." 
It  seems  to  me  this  method  would  simplify  the  pro- 
cess, and  furnish  a  solution  of  the  diiiiculty  of 
arriving  at  an  estimate  of  the  real  standing  of  parties 
offering  for  discounts. 

W. — The  plan  is  a  feasible  one,  and  it  is  sur- 
prising that  "  the  sharp-sighted  managers  "  never  hit 
upon  it.  Its  adoption  would  save  the  banks  the 
enormous  expense  of  keeping  up  an  army  of  spies  ; 
and,  moreover,  would  not  be  half  so  distasteful  to 
their  customers  as  the  present  method. 

Y. — But  are  we  to  assume  that  the  banks  only 
are  interested  in  this  mixed  business  ?  If  they  must 
have  good  marks,  and  are  so  willing  to  pay  for  them, 
<;an't  they  be  manufactured  ? 

W. — I  don't  see  why  they  shouldn't ;  there  is 
enough  of  shoddy,  in  all  conscience,  these  days  for 
«very  purpose. 

V. — Before  leaving  this  subject,  there  is  one 
more  question  I  should  like  to  ask:  Is  the  item  of 
Stock  exactly  as  it  is  represented  ? 

W. — As  I  am  rot  in  the  secret  of  the  banks,  I 
shall  have  to  refer  you  to  the  pages  of  the  "  leading 
journal"  in  the  early  part  of  1873,  upon  tliis  very 
point.  It  remarks,  "The  first  point  that  strikes  one 
on  examining  the  foregoing  statement  is  the  great 
increase  which  lias  taken  place,  apparently,  in  tlie 
amount  of  money  plrced  directly  under  bank  con- 
trol   r.B   paid-up    capital.       We    say    a^ii^arently^ 


33 


BEN8ALEM  ;     OK, 


because  there  can  be  no  doubt  that  some  of  the 
increase  is  of  a  fictitious  and  deceptive  character. 
It  is  well  known  to  many  that  a  certain  proportion — 
probably  ten  millionSy  in  round  numbers — lias, 
practically,  no  existence  whatever.  The  banks  are 
prohibited  from  making  loans  on  the  security  of 
their  own  stock  ;  but  they  car.  and  do  lend  on  the 
stocks  of  other  banks,  (in  the  statement,)  and  it  is 
easy  to  understand  how,  under  these  circumstances, 
bank  capital  may  nominally  be  increased  without 
there  being  a  corresponding  increase  in  the  sum  total 
of  the  funds  held  by  tlie  banks  in  tlie  aggregate. 
Of  coui  .  ^O'Mis  were  made  on  stock  collaterals  pre- 
vious to  li  as  well  as  since  then,  but,  by  no  means, 
to  the  same  extent :  and  we  nuiy  have  liere  a  dis- 
turbing element  in  the  cf'i.:;ulation,  at  which  it  is 
not  easy  to  arrive  with  anything  like  exactness." 
Is  that  not  satisfactory  ? 

V. — Tlie  banks  discounting  each  other's  stock. 
Since  your  bauks  trade  beyond  their  means  and 
don't  give  sccurit}'  for  their  issues,  how  does  the 
legislature  justify  tlie  action  of  granting  charters 
to  such  monopolies  ? 

W. — I  cannot  say.  An  honest  attempt  was, 
indeed,  made  by  a  late  finance  minister  to  throw 
more  seen  'ty  into  the  system  ;  but  proving  himself 
unequal  to  the  task,  he  found  it  convenient  to  resign 
and  accept  a  situation  in  an  English  banking  house. 
Notwithstanding  youi*  condemnation  of  the  law, 
however,  it  must  be  thought  a  good  one,  when  eo 
many  new  banks  are  being  organized  under  ita 
provisions. 


THE     NEW     ECONOMY. 


39 


I 


y. To  me  it  is  only  surprising  that  capitalists 

are  so  slow  in  availing  themselves  of  its  advantages; 
for  it  must  be  ^  profitable  busUiess  when  property 
and  interest  too,  can  be  had   on  such   easy  terms. 
Verily,  the  banker  of  the  period  is   in   the  lucky 
possession   of   the  famous   ring  of  G-/yges,  which 
smites  the  public  blind  to  their  true  interests  !     To 
form  an  estimate  of  the  utility  of  Joint  Stock  Baiuc- 
ing,  as  an  industrial  engine,  for  the  development  of 
the  resources  of  the  country,  you  have  only  to  con- 
sider where  are  the  government  securities,  railroad 
bonds,  bank  stocks,  etc.,  and  you  will  discover  they 
have  gone,  with  other  valuable  securities,  into   the 
possession  of  foreign  money  lenders— foreign  in  a 
commercial  point  of  view. 

The  commercial  balance  of  Canada,  during  the 
past  twenty  years,  has  been  almost  constantly  on  the 
wrong  side  of  the  ledger,  I  understand ;  necessitac- 
ino-  the  exportation  of  the  above  mbutioned  securi- 
tie°  ;  interest  upon  which,  has,  of  course,  antuvally  to 
be  exported. 


A  8 


THE  BANK  OF  ENGLAND. 


The  invention  and  use  of  paper  money  forms  one 
of  the  most  interesting,  as  well  as  instructive  pages, 
in  the  annals  of  commerce.  It  marks  at  once  the 
credulity,  the  ignorance,  the  enterprise,  and  sordid 
love  of  gain  prevalent  in  that  period.  The  Ccttab- 
lishment  and  early  management  of  the  Bank  of 
England,  are  credited  with  its  introduction;  but  the 
unqualified  condemnation  of  that  powerful  institu- 
tion— which  has  so  long  led  the  finances  of  the 
world  for  its  handiwork — would  be  uncalled  for 
at  present,  as  there  were  mitigating  circumstances 
which  rendered  it  necessary  that  something  f^hould 
be  done  to  meet  the  wantt:  of  extending  commerce ; 
and  paper  money  met  the  exigency',  more  especially 
in  the  estimation  of  the  banker,  who  sought  not  so 
much  the  relief  of  industry  as  the  increase  of  his 
own  gains;  hence  the  want  and  the  opportunity 
were  coincident.  In  consequence  of  the  explosive 
material  of  which  it  was  composed,  however,  the 
bank  passed  through  many  vicissitudes  in  the  first 
century  of  its  existence.  At  the  commencement  of 
the  war  with  Napoleon  Bonaparte,  in  1797,  it  sus- 
pended payments,  and  for  twenty-four  years  issued 


THE     NEW    ECONOMY. 


41 


greenbacks.  Eventually,  in  1844,  it  redeemed  its 
honor  by  accepting  the  famous  act  of  Sir  Robert 
Peel,  separating  the  issue  department  from  the 
bank,  and  placing  it  under  government  control. 
The  issues  are  no  •  secured  by  government  stocks 
and  gold ;  and  having  carried  good  faith  to  a  higher 
degree  of  certainty  than  any  similar  institution,  it 
merits  the  praise  of  being  the  most  honorable  bank- 
ing company  in  the  world.  But  as  a  motive  power 
to  industry,  it  is  too  conservative,  and  fails  to  utilize 
its  vast  means.  So  it  has,  in  consequence,  incurred 
the  charge  of  being  so  good  as  good  for  nothing. 
The  balance  of  trade  annually  throws  the  surplus 
earnings  of  the  world's  industry  into  its  lap;  but  it 
is  incapable  of  making  use  of  these  advantages  in 
consequence  of  being  so  much  beholden  to  gold — in 
that  proportion,  in  fact,  is  its  pow^r  and  usefulneis 
limited ;  but  its  obligations  are  unquestioned.  There 
can  exist  but  one  Bank  of  England  under  the  cen- 
tralizing influences  of  gold.  The  moment  the  balance 
of  trade  forsakes  Great  Britain,  in  that  hour  must 
the  bank  be  reconstructed. 


■h 


I  i  \ 


m 


PAPEK  MONEY  1 

It  is  the  misfortune  of  active  industry  tliat  tlie 
world  has  been  governed,  not  by  statesmen,  but  by 
bankers;  but  it  is  bootless  to  blame  Patterson  and 
Law  for  the  share  they  took  in  perpetrating  paper 
money  upon  the  world.  It  was  no  blunder  on  their 
part.  They  got  their  reward ;  but  a  higher  name 
must  answer  for  the  error  by  their  reputation.  The 
claims  to  immortality  which  have  so  long  and  indul- 
gently been  conceded  to  the  author  of  "The  Wealth 
of  Nations,"  must  relax,  when  a  definite  knowledge 
is  attained  of  the  error  he  committed  by  accepting 
the  formula  of  a  banker  as  his  ideal  of  money.  It 
was  this:  "If  in  a  community  requiring  a  £1,000 
to  do  all  the  exchanges,  you  set  afloat  a  £1,000  of 
paper  promises  for  gold.  It  will  happen  that  £800 
of  the  specie  will  find  employment  abroad ;  £200 
will  remain  in  the  bank  for  occasional  redemption, 
and  the  notes  will  circulate."  It  is  not  for  me  to 
explain  how  the  discriminating  mind  of  Smith  mis- 
took, in  this  instance,  the  shadow  for  the  substance; 
but  it  was  a  fatal  error.  He  looked  upon  money  as 
simply  an  instrument  of  exchange,  forgetting  that 
it  could  not  be  a  measure  without  holding  an  equal 


THE    NEW    ECONOMY. 


48 


value  to  the  article  purchased.  The  miBtake  was 
that  of  a  philosopher,  however ;  for  sordid  gain  never 
stained  his  character.  Yet  his  name,  it  is  to  be  re- 
gretted, has  been  capital  in  the  hands  of  wily 
schemers,  as  it  has  long  been  customary  for  bankers 
to  cover  up  their  iniquity  by  a  quotation  fro-n  "  The 
Wealth  of  Nations." 

Generally  speaking,  the  staple  materials  of  the 
various   arts   and    manufactures   are   selected   with 
judgment.     Steel  is  used  for  watch  springs;  leather 
for  shoes ;  tallow  for  soap.     Paper  is  never  tliought 
of  for  such  purposes.     Nor  is  it  used  for  gun  barrels, 
nor  steam  boilers,  because  it  is  considered  too  weak 
and  explosive.     And  yet  paper,  or  I  should  rather 
say  a   mixture,  mainly  of   paper  and  promises,  is 
used  in  many  countries  for  the   manufacture   of  the 
most  explosive  engine  of  commerce-money.     Why 
should  it  be  doubted  that  the  true  staple  will  yet  be 
found  for  the  manufacture  of  money  ^     But,  how  the 
world  should  have  plodded  along  so  slowly  towards 
this  secret,  is  a  mystery  that  may  be  left  to   the 
future  for  solution. 


M 


til 


''■< 


A  NATIONAL  CUKRENCY. 

W. — If  Joint  Stock  Banking  fails  to  supply  the 
wants  of  trade,  and  to  reduce  the  rate  of  interest, 
might  not  a  national  issue  serve  the  purpose  ? 

V. — I  grant  there  are  advantages  in  favor  of  a 
national  over  a  company  issue :  the  one  is  the  due 
bill  of  the  government,  while  the  other  is  that  of  a 
private  company. 

W. — If  bank  bills  are  no  security,  greenbacks 
are,  at  least,  a  mortgage  upon  tlie  revenue. 

V. — It  is  not  difficult,  however,  to  prove  that 
even  a  national  issue  does  not  contain  all  the  elements 
of  a  perfect  security.  The  best  security,  as  I  under- 
stand it,  means  that  the  face  of  the  note  may  be 
realized — by  law,  if  not  otherwise.  Not  so  with  a 
national  currency,  since  it  is  not  based  upon  any 
specified  valuation  of  property,  and  cannot,  there- 
fore, be  enforced.  Hence  greenbacks,  during  a 
period  of  twelve  years'  experiment,  fail  to  approach 
nearer  to  the  international  standard  than  about 
ninety  cents  to  the  dollar. 

W. — If  you  receive  ninety  cents  a  dollar  from 
the  broker,  w^liat  does  it  signify,  if  you  gave  no  more 
consideration  for  it  ? 


THE    NEW    ECONOMY. 


45 


Y. — True,  grecnl  acks  luive  served  to  carry  a 
great  nation  through  ihe  most  trying  period  of  its 
liistory,  and  since  the  close  of  the  war  has  been 
equally  useful  in  the  peaceful  channels  of  trade  ;  but 
the  United  States  labors  under  very  great  disadvjin- 
tages  in  consequence  of  the  shifting  value  of  the 
currency.  The  Gold  Exchange  had  its  origin  in  the 
inflation  ;  and  though  it  has  its  uses  in  determining 
the  market  price  of  the  currency,  or  the  gold  pre- 
mium, yet  it  is  a  powerful  engine  of  speculation  and 
gambling,  which  bold  operators  use  to  unsettle  values. 
Not  only  are  railroad  and  other  stocks  played  upon, 
but  the  manufacturing  interests  of  the  country  are 
sacrificed — the  market  being  laid  open  to  foreign 
goods  in  spite  of  an  unprecedented  tariff. 

W. — It  must  be  remembered  that  more  than 
one-half  of  the  national  debt  of  the  United  States  is 
held  abroad,  necessitating  the  export  of  a  heavy 
payment  of  annual  interest ;  and  until  the  debt  is 
either  imported  or  cancelled,  the  finances  cannot  be 
at  all  satisfactory.  But  the  discount  to  which  the 
currency  is  subject,  you  must  allow  is  less  the  cause 
than  the  effect  of  that  debt. 

Y. — Admitting  what  you  say,  then  in  the  United 
States  and  Great  Britain  you  have  examples  of  a 
national  currency  in  different  conditions — tlie  one  at 
a  discount,  and  the  other  at  par — corresponding  to 
the  locality  ot  their  respective  debts,  as  held  abroad 
in  the  one  case,  and  by  the  citizens  in  the  other  ; 
yet  in  neither  circumstances  has  the  currency  met 
the  requirements  of  trade,  as  the  industrial  classes 


•  I 
II 


46 


BENBALEM  ;    OR, 


are  still  burdened  by  exborbitaiit  intercBt.     I  further 
object  to  a  national  issue  on  the  following  grounds  : 

1st.  A  government  cannot,  with  justice,  under- 
take obligations — the  issue  of  a  currency — which  it 
has  not  at  command  the  means  of  discharging.  The 
functions  of  a  constitutional  government  are  simply 
to  do  justice  between  man  and  man,  to  collect  the 
revenue,  and  disburse  current  expenses. 

2d.  It  is  assuming  to  tax  private  property  to  an 
unlimited  extent  without  the  people's  consent. 

3d.  It  should  not  be  the  duty  of  a  free  govern- 
ment to  compete  with  brokers  and  dealers  in  securi- 
ties. 

4th.  The  Secretary  of  the  Treasury  cannot  possi- 
bly possess  the  knowledge,  and  ougltt  not  to  have 
the  power,  of  regulating  the  quantity  of  circulation 
to  the  wants  of  trade.  Every  such  interference 
must  necessarily  be  impertinent. 

5th.  In  neither  Great  Britain  nor  in  the  United 
States,  has  a  national  currency  been  placed  upon  th« 
same  footing  with  commodities. 

6th.  It  places  too  great  a  temptation  in  the  hands 
of  the  party  in  power  to  use  it  for  malpractices. 

7th.  All  national  currenees  are  founded  uj^on 
debt,  and  necessarily  tax  industry  unfairly.  A  pros- 
perous country  should  not  have  a  debt,  but  it  could 
not  do  without  a  currency. 

W. — What  is  your  opinion  of  the  banks  in  the 
United  States  ? 

V. — Banking  there  is  quite  legitimate.  The 
currency  is  accepted  as  security.  The  people  can 
do  what  they  please  with  their  money. 


ON  SECUllITY. 

V. "  Hereby,"  bays  G(Bthe,  "  wobiiiiglioineto 

onr  conceptions  the  high  worth  of  property  in  hmd, 
and  are  oWiged  to  consider  it  a&  tlie  lirst  accpiire- 
ineiit  that  can  l)e  aUotted  to  man.  Yes,  nature  her- 
self  has  bo  ordered  it !  A  man  born  on  the  gl/))e  i- 
comes,  by  habit,  to  belong  to  it;  the  two  grow 
together,  and  tlie  fairest  ties  are  spun  from  their 
union  Who  is  there  that  would  slight  this  founda- 
tion stone  of  all  existence  T 

Who  can  doubt  that  productive  landed  property 
is  the  natural  foundation  of  society  and  commerce  'i 
Not  oidy  do  the  productions  of  the  soil  go  directly 
towards  the  supply  of  tlie  as  -mal  necessities  in  food 
and  clothing,  but  into  the  price  of  every  mannfac- 
ture  does  the  support  of  the  laborer  enter  as  a  lead- 
ing element.     In  a  variety  of  ways  it  may  be  shown 
that  property  in  land  is  a  first  necessity,  and  has  a 
priority  of  security,  as  well  as  value.     The  farmer  is 
unconsciously  in  possession  of   the  most  powerful 
lever  of  civilization,  in  the  shape  of  security  ;  yet  his 
interests  have  been  controlled  by  money  institutions, 
which  have  lessened  the  value  of  his   products,  in- 
creased the   charges   on   their    transportation,    and 
raised  the  prices  of  manufactured  goods.     He  has 
been  sedulously  schooled  into  the  notion  that  banks 
are  httle  providences,  divinely  commissioned  to  fur- 


48 


BENSALEM ;     OR, 


nish  money  for  the  purposes  of  trade,  and  the  mov- 
ing of  his  crops ;  meanwhile,  he  being  but  too  happy 
to  handle  a  few  dollars  occasionally,  than  to  give  any 
attention  to  questions  of  economy,  which  are  now 
agitating  the  brains  of  thinking  persons ;  and  upon 
the  solution  of  which  depend  the  improvement  of 
the  condition,  not  only  of  his  own  class,  but  of  all 
classes  in  the  community.  Philosophers  say,  before 
man  can  use  the  world  aright  he  must  accustom  him- 
self to  distinguish  between  one  object  and  another. 
Popular  opinions  must  l)e  tested,  and  their  fruits 
and  errors  carefully  sifted  and  separated.  "  A  good 
tree  cannot  bring  forth  evil  fruit;  nor  can  a  corrupt 
tree  bring  forth  good  fruit,"  is  a  maxim  as  suitable 
to  finance  as  to  morals.  Remember,  that  a  true 
economy  is  not  something  which,  by  luck,  may  turn 
out  well  for  us,  and  without  luck  may  prove  a  failure. 
On  the  contrary,  it  must  ])e  that  which  is  calculable 
and  axiomatic  in  its  principles.  Tiiat  credit  should 
have  presumed  so  long  and  successfully  to  tax 
security,  doubtless  arose  from  the  owners  of  the  best 
securities  not  appreciating  their  advantages  in  the 
social  or  industrial  scale.  Is  not  the  history  of  mone- 
tary science  much  like  that  of  an  architecture  which 
commences  not  at  the  foundation  to  build  a  house, 
but  at  the  top  of  the  chimney  ?  Credit  correspond- 
ing with  the  chimney  pots  in  the  air ;  a  national 
issue  with  the  first  floor  ;  whilst  security  composes 
the  solid  foundation  of  the  stru^lure  ?  CommercCy 
during  almost  ever}*^  decade  of  the  past  centuries, 
has  suffered  ombarrnssment  and  loss,  in  consequence 
of  baseless  chimneys  toppling  over,  and  precipitating 


THE     N.^V/    ECONOMY. 


49 


their  objectionable  debris  upon  the  unoffending  but 
dihgent  workers  in  the  lower  parts  of  the  building. 
Only  imagine  the  dismay  and  chagrin  to  which  those 
honest  toilers  in  the  basement  were  subjected,  when 
periodically  forced  to  assume,  in  addition  to  their 
own  burdens,  the  dishonored  debts  of  their  more 
presumptuous  fellows !  Be  aware  that  credit,  wild 
and  irresponsible  as  it  may  be,  must  at  last  be  born 
by  security ;  and  every  crisis,  panic,  failure,  and 
revulsion  has  to  be  made  good,  either  by  the  broad 
shoulders  of  capital,  or  the  brains  and  muscles  of 
active  labor. 

W. — It  will  hardly  be  doubted  that  security  ia 
the  best  staple  from  which  to  manufacture  money; 
as  very  generally  the  ablest  tliinkers  are  coming 
round  to  such  views ;  and,  besides,  there  are  the 
practical  examples  of  both  Great  Britain  and  the 
United  States  in  favor  of  security  money. 

V. — The  theory  and  practice  of  both  these 
nations  evince  progress  in  monetary  science  ;  but  the 
defects  of  a  national  issue,  as  has  been  pointed  out^ 
are  sufficiently  important  to  limit  its  usefulness ;. 
besides  it  is  impossiMe  to  look  upon  the  condition 
of  the  working  man  in  either  of  these  countries  with 
complacency.  If  capital  distinguishes  civilized 
society  from  barbarism,  more  certainly  will  the  dis- 
tribution of  capital  mark  the  higher  civilization, 
winch  is  the  vantage  ground  of  the  working  man. 

W. — But  how  do  you  discover  the  best  security  ?' 

V. — Only  observe  what  the  money  lender 
chooses  as  the  best;  he  infaUibly  lays  his  hands  upom 
productive  property  when  ]je  has  his  choice. 


ff 


50 


it 


BENfiALEM  ;    OR, 


W. — Tliere  are  a  variety  of  securities. 

V. — True ;  there  are  goverument  securities, 
railroad  bonds,  corporation  debentures,  bank  stocks, 
and  others.  These  securities,  judging  impartially, 
are  valuable  in  proportion  to  the  solvency  of  their 
respective  corporations,  and  the  dividends  or  interest 
they  pay.  All,  however,  are  of  secondary  importance 
to  the  security  of  productive  propert}^  and  dependent 
upon  that  interest,  more  or  less,  for  their  availability 
as  investments. 


CREDIT   FONCIER  SOCIETIES. 

The  history  of  "Credit  Foncier"  is  particularly 
interesting  to  the  student  of  finance.  This  manner 
of  loaning  money  upon  real  property  originated  in 
Silesia,  Prussia,  about  1770,  or  immediately  after  the 
seven  years'  war.  The  country  was  in  a  deplorable 
condition  by  reason  of  the  war,  and  the  low  price 
of  provisions  after  the  war  was  over.  The  rate  of 
interest  had  risen  to  about  ten  per  cent.,  and  an 
additional  two  or  three  per  cent,  commission  was 
demanded  of  the  ruined  propriety'  s.  The  aggregate 
of  their  debts  was  enornious  ;  and  they  were  every 
day  in  fear  of  losing  their  estates.  Tiiis  suggested 
to  a  trader  of  Berlin,  M.Buring,  the  idea  of  relieving 
the  distress  by  substituting  for  the  responsibility  of 
each  debtor  the  collective  guarantee  of  a  company 
of  landed  proprietors,  wliose  estates  should  all  be 
pledged  to  the  company  by  a  contract  of  mortgage. 


THE     NEW     ECONOMY. 


61 


This  id  fandamentally  the  principle  of  Credit  Fon- 
cier,  which  has  spread  itself  over  Germany,  Belgium, 
and  France  ;  and  which  has  been  so  much  landed  by 
persons  engaged  in  similar  transactions  in  Canada. 
Doubtless  much  good  has  been  accomplished,  and 
chiefly  in  this  particular:  the  rapacity  of  the  coaimon 
usurer  was  checkmated  by  the  su1)stitution  of  a  lower 
rate  of  interest  for  money  borrowed  upon  real  estate. 
The  system  might  have  originated  in  the  humanest 
motives;  but  relief  could  certainly  have  been  afforded 
to  the  suffering  proprietors  upon  a  less  expensive 
plan.  Why  was  it  not  suggested  to  the  proprietors 
that  they  themselv^es  might  form  a  company,  all 
equally  interested,  and  might  borrow  money  directly 
instead  of  having  it  come  through  the  hands  of  a 
company  of  brokers  that  would  exact  a  shave  for 
their  services.  The  contract  of  mortgage  from  the 
half-ruined  proprietors  was,  after  all,  the  basis  and 
guarantee  for  the  loan  effected,  and  not  the  capital 
of  the  company,  which  doubtless  was  but  nominal, 
or  a  fraction  only  paid  up,  as  ara  all  such  projects 
got  up  for  the  handling  of  tlu"  property  of  others 
for  their  own  pecuniary  bohoot. 

I  have  before  me  tlu^  prospectus  of  the  Boston 
Mortgage  Company.  Tm.-?  company  is  being  organ- 
i><"  l^and  publish  their  inducoinents  to  pf3r8ons  desir- 
ous of  becoming  stockholders,  lis  nominal  capital 
is  $2,000,000,  in  shares  oi'  $100  eacli;  to  be  lo^iated 
and  managed  in  that  city.  The  object  of  the  com* 
pany  is  to  loan  and  re-loan  its  money  ii|>on  first 
mortgages  on  real  estate,  situate  in  the  State  of 
Massachusetts  or  elsewhere,  to   the   extent  of  fifty 


52 


BENSALEM  ;     OR, 


per  cent,  of  the  a,v  tual  cash  value  of  the  property 
loaned  upon  ;  and  to  take  as  evidences  of  such  loans 
bonds  or  notes, payable  to  itself  at  its  office  in  Boston, 
and  securiid  by  deeds  of  trust  or  mortgage.  These 
notes  and  securities  the  company  are  authorized  to 
endorse,  guarantee,  and  sell  to  ten  times  the  amount 
of  its  capital  and  guarantee  fund  /  The  business 
man  and  capitalist  who  will  take  occasion  to  examine 
into  the  powers  guaranteed  to  this  company  by  its 
charter,  will  not  fail  to  see  that,  with  judicious 
management,  its  stock  will  prove  a  safe  and  profita- 
ble investment.  "  Dealing  in  the  safest  securities 
known  to  human  experience — -frst  mortgages  on 
real  estate — it  cannot  fail  to  be  highly  profitable." 
Similar  institutions  are  in  successful  operation  in 
New  York  and  Montreal,  the  stock  of  which  is  sell- 
ing largely  above  par. 

This  company  plainly  tells  the  holders  of  real 
estate  what  they  ought  to  have  known :  Ihat  money 
lent  on  first  mortgage  to  half  the  value  of  the  pro- 
perty, has  prime  security ;  and  further,  that  such 
securities  are  the  safest  known  to  human  experience ; 
and  furtlier,  that  a  hundred  dollars  will  manage  a 
thousand  dollars'  worth  of  such  securities;  because 
they  are  of  so  much  intrinsic  value  as  to  float  of 
themselves.  It  is,  evidently,  the  opinion  of  the 
legislature  that  grants  these  powers,  that  the  mort- 
gages described  would  negotiate  themselves,  with- 
out any  extraneous  aid.  But  I  may  now  tiotice  a 
successful  institution  of  tlie  kind  nearer  home.  The 
Trust  and  Loan  Company  of  Canada  has  been  en- 
gaged in  this  business  the  last  twenty  years  or  more. 


THE     NEW     ECONOMY. 


53 


Its  head  office  is  in  London,  England ;  and  the  Can- 
ada agency  located  in  Toronto,     Its  nominal  capital 
is  one  million  Stirling,  and  I  am  not  aware  that  over 
twenty  per  cent,  is  paid  up.     It  has  been  a  useful 
institution  to  the  farmers,  inasmuch  as  it  has  nego- 
tiated their  mortgages  in  Europe  at  a  low   rate   of 
interest,  and  furnished  them  money  more  reasonable 
than  could  have  been  had  from  the  ordinary  "Jeremy 
Diddler."     No  better  proof  of  the  high  character 
of  ordinary  farm  security  can  be  demanded,  than 
that  this  institution  has  been  in  successful  operation 
for  so  long  a  time,  and  done  an  extensive  business 
with  a  comparatively  nominal  capital.     I  may  here 
state  that  the  letter  de  gage  of  the  Credit  Foncier 
system,  which  is  equal  to  the  common  mortgage  m 
value,  maintained  its  value  better  than  the   public 
funds      In  the  Revolution  of  1848,  in  Silesia  and 
and  Pomerania,  they  stood  at  93  ;  Western  Prussia, 
83  •  Eastern  Prussia,  96  ;  when  other  public  securitieB 
experienced    a  frightful  depression.      The   Enghsh 
three  per  cents  fell  to  50  early  in  the  present  century. 


THE  FIRST  MORTGAGE  ON    PRODUCTIVE    PROPERTY 
THE  BEST  SECURITY. 

These  instances  furnish  all  the  proof  necessary 
of  the  prime  importance  of  productive  land  as  a 
security.  In  all  these  institutions,  the  lirst  mortgage 
forms  the  basis,  security,  strength,  and  success  of 
the  concerns  themselves.  Not  only  does  the  mort- 
gage raise  the  money  to  relieve  the  necessitous  far- 
mer, but  it  pays  those  companies  or  brokers  a  hand- 
some income  for  their  services  of  management.  Can 
there  be  any  further  necessity  to  accumulate  proof 
in  order  to  open  the  eyes  of  the  fortunate  possessors 
of  such  property,  and  to  teach  them,  not  only  their 
duty  to  themselves,  but  to  society  in  general ;  since 
it  is  consonant  with  their  own  best  interests  ? 

What  I  have  been  illustrating,  in  a  variety  of 
ways,  is  that  all  currencies,  issued  upon  whatever 
pretence  or  principle,  must  fall  back  upon  the  best 
securities  to  make  good  losses,  together  with  com- 
missions, brokerage,  etc.  Why  not,  therefore,  con- 
struct a  currency  directly  upon  those  securities,  and 
save  the  c-harges  which  support  the  banker  and 
broker,  burdening  the  producer?  You  have  prob- 
ably heard  of  the  Eastern  Prince,  whose  factor 
levied  a  heavy  tax  npon  the  tillers  of  the  soil  for 
the  water  they  required  for  the  purposes  of  irriga- 
tion.    So  burdensome  had  been  those  exactions  that 


THE     NEW     KOONOMY. 


55 


they  could  not  afford  to  pay  for  water  to  irrigate 
their  lands.  The  conseciuence  was  that  tlie  lands 
ceased  to  produce,  and  the  revenue  of  the  prince 
proportionally  diminished,  while  there  was  no  lack 
of  water  in  the  imperial  reservoir.  On  careful  in- 
quiry, the  king  became  assured  that  his  tyrannical 
factor  was  to  blame.  So  he  passionately  commanded 
that  the  unjust  steward  be  thrown  into  the  reservoir 
to  sink,  or  swim  for  his  life ;  and  that  the  sluices  be 
immediately  opened  upon  the  famishing  country, 
when,  from  an  abundant  supply  of  water,  the  crops 
improved,  and  the  wheels  of  industry  began  to  move. 
Now,  the  difference  between  the  new  economy  and 
the  old  methods  of  supplying  money,  is  this :  That 
while  the  banks  throw  every  obstruction  in  the  way 
of  getting  at  the  national  reservoir  of  securitj^ — be- 
cause it  is  their  interest  to  do  so — the  security  bank 
taps  it  for  the  benefit  of  the  whole  country,  saving 
industry  all  unnecessary  charges,  commissions,  brok- 
erages, interests,  etc. 

W. — ^Then  you  would  give  the  power  of  issuing 
money  to  the  parties  who  possess  the  security,  who- 
ever that  may  be. 

Y. — Yes,  to  whoever  has  the  staple  of  manu- 
facture— to  use  it,  or  abuse  it,  as  he  pleases.  Let  it 
be  enacted  that  the  possessor  of  productive  property 
be  empowered  to  issue  money  to  the  extent  of  a  half 
or  a  third  of  its  fair  cash  value ;  and  that  said  issue 
shall  constitute  a  first  mortgage  upon  the  property. 


A4 


r 


THE  SECURITY  BANK  OF  ISSUE. 


I  I 'I 


Allow  me  to  give  in  the  following  document  the 
leading  principles  of  the  constitution  of  the  Security 
Bank  of  Issue,  of  Bensalem,  which  speaks  for  itself, 
and  makes  many  questions  unnecessary  to  be  asked. 

Copy   of   the   Act    of  Incorporation    of  the 
Security  Bank  of  Issue. 

1.  Productive  or  farm  lands  only,  are  recognized 
by  the  provisions  of  this  Act. 

2.  The  farms  to  be  valued  by  two  officers ;  one 
chosen  by  the  bank,  and  the  other  by  the  govern- 
ment. 

3.  A  registry  book  kept  by  each  county,  in  which, 
opposite  the  owner's  name,  will  be  credited  the 
valuation,  and  debited  the  legal  encumbrances : 
mortgages,  judgments,  etc. 

4.  The  proprietor  is  entitled  to  draw  currency 
to  the  amount  of  half  the  value,  upon  having  a  first 
mortgage  duly  registered  against  the  property  for 
the  amount. 

5.  A  proprietor  may  object  to  the  valuation 
made.  All  such  cases  will  be  referable  to  a  Court 
of  Revision  for  adjustment. 

6.  Ten  per  cent,  of  the  mortgages  may  be  nego- 
tiated for  gold,  at  such  a  rate  of  interest  as  will  be 
an  inducement    to  investors;    forming   a  fund   of 


THE     NEW     ECONOMY. 


W 


exchange.     Sucli  mortgages  may  be  foreclosed  at  a 

specified  time.  ,     .      j 

7.  The  currency  will  be  exchangeable  at  the  head 

office  for  gold  at  par,  on  demand. 

8.  A  small  charge  made  to  meet  expenses,  say 

one  per  cent. 

9  Mortgages  limited  in  time,  only  at  the  option 
of  the  mortgagor,  unless  in  cases  where  they  are 
negotiated  for  exchange. 

10  Notes,  or  sub-mortgages,  will  be  signed  by 
the  cashier  and  countersigned  by  the  Dominion 
Secretary  of  the  Treasury,  the  latter  name  sigmfymg 
the  nature  of  the  security. 

11.  The  office  will  open  for  business  when  ten 

miUions  is  demanded.  ~n\     f 

12.  The  business  will  only  be  that  of  a  Bank  ot 
Issue,  and  no  deposits  received. 

13    Mortgages   payable   in  whole,  or   in    part, 
always  at  par  value,  at  the  option  of  the  mortgagor. 
14:.  AH  issuers  become  stockholders. 
15*.  Officers  of  the  bank  chosen  by  stockholders. 


THE     NEW     ECONOMY 


69 


W. — It  is  surprising  that  just  ideas  on  currency 
liavc  made  such  slow  progress. 

V. — All  things  considered,  it  is  not  to  he  won- 
dered at,  as  the  persons  who  niuke  the  property  are 
seldom  the  individuals  wlio  handle  and  control  it. 
The  hitter  duty,  and  the  pleasanter  of  the  two,  has 
always  been  entrusted  to  penniless  agents,  or  bankers, 
whose  interest  it  was  to  play  an  underhand  game 
with  industrious  and  hard-working  people  ;  making 
them  believe,  if  possible,  that  black  is  white.  Ex- 
perience teaches,  however,  tliat  the  class  who,  by 
their  industry,  grow  wheat  and  other  useful  crops, 
raise  cattle  and  sheep,  etc.,  and  take  the  advantage 
of  the  markets  in  season,  are  quite  competent  to 
manage  their  finances  also. 

W. — But  would  it  not  burden  the  producer  with 
duties  foreign  to  his  profession  ? 

V. — By  no  means ;  it  takes  but  few  heads  to 
manage  any  equitable  system.  Each  proprietor 
would  have  only  to  mind  his  own  particular  interest : 
to  issue  when  he  could  make  anything  by  it,  and 
pay  back  when  it  would  only  be  liable  to  loss  in  his 
possession.  That  much  is  easily  learned.  You  per- 
ceive the  basis  is  sufficiently  broad  to  supply  all  the 
money  needful  to  trade.  It  would  be  issued  when 
wanted,  returned  when  not  wanted;  as  a  farmer 
raises  wool  when  there  is  a  market  for  it,  but  when 
the  demand  stops,  he  sells  off  his  flocks. 

W. — That  looks  reasonable  enough;  but  what 
do  you  suppose  is  the  aggregate  value  of  the  im- 
proved farms  of  the  Dominion  ? 

V. — It  cannot  fall  short  of  six  hundred  millions 


IT" 


60 


BEMJALKM  ;     OK, 


of  dollars ;  and  if  Btatistics  are  reliable,  a  good  deal 
more. 

W. — How  much  currency  would  be  required  ? 

V. — That  is  a  foohsh  question.  Wlio  can  tell 
the  amount  that  is  wanted  ?  Doubtless,  sufficient 
would  be  issued  to  transact  business  mainly  upon 
cash  terms.  A  style  of  business  would  then  exist 
very  different  from  the  present  usage. 

W. — There  would  be  little  need  of  credit. 

V. — Nor  of  book-keepers  neither. 

W. — I  am  sorry  for  that,  as  many  a  decent  fel- 
low is  eking  out  a  bare  living  at  this  profession.  But 
then  he  will  be  employed  at  something  worthy  of 
his  talents,  and  for  better  pay,  I  presume,  under  the 
new  regime. 

V. — Certainly.  The  new  economy  will  increase 
the  ranks  of  the  producing  classes  wonderfully.  As 
a  natural  consequence,  one  of  the  first  acts  of  the 
legislature  would  be  to  rescind  all  laws  for  the  collec- 
tion of  debts.  Dealers  would  then  sell  for  cash,  or 
run  the  risk  of  losing  their  pay. 

W. — I  have  myself  often  thought  what  a  mean 
use  the  legislature  makes  of  a  citizen  when  it  forces 
him  to  harass  a  poor  fellow-citizen  for  a  debt,  and 
one  probably  pawned  upon  him  by  a  not  over- 
scrupulous dealer. 

V. — It  is  outrageous,  I  confess.  Such  a  circum- 
stance could  never  occur  in  Bensalem.  Has  the 
creditor  not  the  choice  to  keep  his  goods  or  give 
them  away  ?  And  if  he  prefers  the  latter,  who 
should  complain  ? 

W. — But  what  would  the  lawyer  say  to  this  change? 


!i    :;■ 


THE     NEW     ECOXiOMY. 


61 


V. — Were  it  not  that  tlie  producing  classes 
greatly  outnumher  this  learned  proteBsioii,  bucK  a 
monetary  law  could  never  be  placed  upon  the  Statute 
Book.  But  I  cannot  convince  myself  neither,  tliat 
a  protbssion,  which  rarely  admits  a  fool,  would  be 
the  last  to  acquiesce  in  a  change  so  boneticial. 

W. — Will  it  not  appear  a  manifest  injustice  to 
give  such  power  to  the  farmer  'i 

V. — You  mean  the  owner  of  the  property,  1 
presume  ?  I  fail  to  perceive  the  injustice  of  grant- 
ing such  a  power  to  the  only  class  who  can  pay  for 
it.  What  I  have  been  objecting  to  so  strongly 
throughout  the  conversation  is  tlie  legislature  giving 
such  power  to  a  class  that  cannot  pay  for  it.  You 
perceive  the  new  economy  is  an  equitable  system  : 
the  goods  go  to  the  man  who  pays  for  them. 

W. — Would  the  mortgaging  of  farms  not  lead 
to  loss  in  many  instances? 

V. — No  more  than  at  present ;  not  so  much,  in 
fact,  after  the  system  and  its  working  were  fully 
understood.  Farms  are  now  sunk  by  exhorbitant 
interest,  which  cculd  not  occur  under  a  just  system; 
as  money  would  only  cost  one  per  cent,  to  the  issuer. 
It  is  true  such  a  law  would  not  prevent  proprietors 
making  an  unwise  use  of  money,  which  they  may  do 
under  any  circumstances.  But  the  right  of  issue 
cannot  be  abused  so  long  as  both  the  giver  and  re- 
ceiver of  money  assume  an  equal  responsibility. 

W. — Would  the  issue  not  be  liable  to  inflation? 

Y. — You  ask  a  question  that  should  have  a  satis- 
factory reply.  Think  of  the  causes  of  inflation  : 
Ist.  Issuing,  regardless  of  the  means  of  redemption. 


i 


r 


62 


BEN8AI.EM  ;     OR, 


,;  i 


2(1.  When  the  issuer  and  receiver  don't  assume  an 
equal  responsibility.  3d.  When  there  is  no  regulat- 
ing check  upon  issues.  In  tlie  case  of  the  Security 
Bank  of  Issue,  every  sub-mortgage  is  a  perfect  secur- 
ity; and  there  is  also  the  reserve  of  gold  to  keep  it 
at  par  with  international  money.  Again,  the  issuer 
parts  with  tui  equal  value  to  that  which  he  receives; 
if  he  gets  a  horse  worth  a  hundred  dollars,  he  gives 
a  mortgage  on  his  land  for  it.  It  is  very  different 
with  any  other  system  extant.  An  ordinary  banker 
gives  his  promise  for  the  horse.  But  as  it  is  so 
much  easier  to  make  promises  than  keep  them,  su 
much  the  greater  is  that  currency  hable  to  inflation. 
There  cannot  be  a  more  wholesome  check  to  over- 
issues than  this  bnlancing  of  responsibilities.  No 
one  gets  into  his  possession  the  property  of  others 
without  giving  for  it  a  suitable  equivak-nt.  Hence 
the  impossibility  to  inflption  of  the  issues  of  the 
Security  Bank. 

W. — Are  you  certain  it  would  reduce  the  rate 
of  interest? 

f. — The  competition  of  interests  would  reduce 
the  rate  to  a  fair  average,  and  what  more  is  wanted? 
The  mi  ^ion  of  the  new  economy  is  to  effect  a  bal- 
ancing of  responsibihties  and  interests.  Hence 
every  value  is  allotted  its  just  weigiit  in  the  scale  of 
induetry,  and  the  lowest  average  is  thus  obtained. 

W. — Would  a  reduction  of  the  rate  not  limit  the 
usefulness  of  capital?  Ana  did  not  the  ancient  phil- 
osophers fail  to  improve  society  by  similar  experi- 
ments ? 

V. — A  reduction  of  the  rate,  as  we  have  seen. 


THE     NKW     KCONOMY. 


63 


leaves  capital  intact ;  but  only  transfers  the  profits 
from  the  usnrer  to  the  workmen.  The  annihilation 
of  money,  on  the  contrary,  wonkl  plunge  society 
again  into  l)ar])arism.  Tliese  excellent  old  worthies 
probably  <^d  not  know  that  money  is  powerful  for 
good  as  well  as  evil,  and  only  requires  to  be  regu- 
lated. I  repeat,  a  reduction  of  the  rate  dispenses 
with  the  vicious  properties  of  money;  but  retains 
in  it  all  that  is  really  useful.  Tlie  economy  of  a 
legitimate  and  permanent  reduction  of  the  rate  of 
interest  will  be  justified  by  tlie  most  decisive  step 
forward  that  civilization  has  ever  made.  Briefly, 
the  farmer  would  have  all  the  means  he  could  use  to 
advantage  in  thoroughly  draining  and  tilling  of  the 
soil.  As  a  consequence,  production  would  be  in- 
creased immensely.  Cheap  products  mean  cheap 
living  ;  then  follow  cheap  manufactures.  The  mech- 
anic and  manufacturer  having  less  interest  to  pay, 
would  have  larger  profits  to  divide.  The  home 
markets  would  tirst  be  supplied,  then  foreign  goods 
kept  out ;  and  the  sum-total  of  industry  immensely 
multiplied. 

W. — But  would  cheapened  manufactures  not 
leave  tiie  laborer  less  for  his  work? 

V. — On  the  contrary.  If  the  nominal  price  of 
labor  declined,  yet  a  day's  labor  would  produce  more 
of  the  necessaries  of  life  than  it  now  does;  and  that 
is  the  main  point.  The  increase  of  machinery  would 
give  relief  from  drudging  toil,  and  afford  more  time 
for  higher  pursuits.  Imports  would  become  beauti- 
fully less,  and  the  balance  of  trade  speedily  reversed. 
The  national  debt,  now  in  foreign  hands,  would  first 


64 


BEN8ALEM  I     OR, 


1,1 


be  imported,  then  cancelled.  Again,  the  security 
system  would  distroy  the  centralizivi,^  influence  of 
gold,  which  now  builds  over-populous  cities,  harbor- 
ing vice,  pestilence,  poverty,  insanity  and  famine  in 
their  rampant  forms.  In  nothing  does  the  new 
economy  appear  to  greater  advantage  than  in  trans- 
ferring capital  from  the  centres  of  population  to  the 
broad  country,  and  that  direction  too  does  population 
take,  as  it  invariably  follows  capital.  The  distribu- 
tion of  capital,  in  fact,  means  the  distribution  of 
population  over  a  healthful  and  productive  industrial 
area. 

W. — Am  I  to  infer  from  your  reasoning  that 
security  will  deprive  gold  of  much  of  its  present 
value  ? 

Y. — Certainly.  It  will  ultimately  be  demone- 
tized, as  a  necessary  consequence.  I  may  here  re- 
mark that  a  resort  to  gold  as  a  reserve  of  exchange, 
is  not  because  it  js  regarded  as  money — far  from  it ; 
but  simply  because  it  now  cancels  debts  between 
nations ;  and  the  new  economy  must  meet  the  exi- 
gency. Any  new  system  that  did  not  fully  meet 
things  as  they  are^  would  prove  inadequate  and 
could  uever  be  introduced.  Hitherto,  unfitness  has 
been  the  great  error  of  all  suggestions  for  improve- 
ment, and  failure  has  been  the  consequence.  You 
must  keep  a  reserve  of  gold,  therefore,  to  humour 
your  worst  industrial  friends. 

W. — But  in  regard  to  the  introduction  of  the 
security  system,  will  it  not  be  necessary  to  first  get 
rid  of  the  styles  of  money  now  current? 

V. — Not  at  all.     Progress  is  not  made  in  that 


I 


THE     NEW    ECONOMY. 


65 


I 


manner.  I  liold  it  is  not  the  province  of  legislature 
to  disfranchise,  so  much  as  it  is  to  grant  rights  that 
have  hitherto  been  ignored.  How  should  railroads 
ever  have  been  introduced,  had  it  been  necessary 
first  to  shut  up  other  highways?  The  right  of  ex- 
istence was  granted,  and  it  is  seen  with  what  result 
— the  public  choose  to  travel  by  rail.  In  like  man- 
ner, the  Security  Bank  of  Issue  is  entitled  to 
existence,  and  let  it  take  its  chances.  If  other  sys- 
tems have  the  stamina  to  exist  besides,  why  object? 
Is  there  too  much  money?  But  there  are  already  a 
great  many  banking  systems  at  work — all  admittedly 
defective.  Then  why  object  trying  a  new  plan — 
one  in  whose  favor  so  much  can  be  said?  The 
claim  I  think  is  valid;  and,  besides,  you  have  the 
example  of  Bensalem  to  boot. 

W. — But  it  will  be  said  Land  Banks  have  proved 
a  failure. 

V. — Have  not  all  banks  proved  failures  at  times? 
You  may  object  the  French  assignats  fell  to  a 
thirtieth  of  their  original  value.  But  it  must  b> 
remembered  that  the  assignats  were  a  lien  upon 
confiscated  church  property,  which  proved  an  unsat- 
isfactory security.  As  to  the  other  instance  I  can 
call  to  mind — the  Pennsylvania  Land  Bank — it  paid 
off  all  its  liabilities.  But  you  must  remember  a 
difference  exists  between  the  Land  Bank  and  the 
Security  Bank  of  Issue. 

W. — The  first  suggestion  of  issuing  money  upon 
land,  I  believe,  is  credited  to  that  noble  minded  and 
most  intellectual  of  men.  Bishop  Berkeley.  He  was 
sensible  of  the  gross  injustice  perpetrated  in  his  day. 


r 


66 


BEN8ALEM  ;     OR, 


m 


over  a  century  ago,  upon  industry,  by  the  capitalist; 
and  resolved  on  making  the  experiment  in  the  New 
World  of  a  Land  Bank.  But  although  he  visited 
America,  it  does  not  appear  he  made  a  serious 
attempt  to  carry  out  his  purpose.  His  opinions  on 
the  subject  were  rudimentary,  and  of  little  value  to 
any  one  making  the  attempt  at  this  period.  But  it 
is  encouraging  to  learn  that  similar  views  of  economy 
were  held  by  one  whose  reputation  as  a  thinker  is 
world-wide.  It  is  anything  but  discouraging  to  the 
promoters  of  the  new  economy  to  refresh  the 
memory  with  the  circumstances  which  called  into 
existence  the  Banks  of  England  and  France.  The 
reckless  South  Sea  scheme  was  a  twin  sister  of  those 
institutions,  and  rivalled  the  Bank  of  England  as  a 
candidate  for  public  favor.  And  not  until  the  latter 
institution  was  made  the  pet  of  the  government, 
was  it  saved  the  disgrace  which  befell  its  adversary. 
When  Lr-v's  Bank  of  France  first  suspended,  it 
possessed  more  gold  in  proportion  to  liabilities  than 
is  required  now-a-days  to  do  a  successful  banking 
business^-evincing  the  virtue  of  management. 


CLOSING    ADDRESS. 

Altabin,  upon  taking  leave,  expressed  himself  to 
the  following  effect:  The  chrysalis  stage  of  civiliza- 
tion, which  justly  characterizes  the  outside  world, 
has  long  ago  eventuated  in  a  higher  development  in 
my  native  land.  The  annihilation  of  interest  fur- 
nished the  people  with  a  new  motive  in  life  ;  so  that 
fiuch  a  thing  as  an  intelligent  being  spending  his 


THE     NEW     ECONOMY. 


67 


whole  life-time  in  money-grubbing  is  unknown.  You 
could  not  bribe  a  citizen  of  Bensalem,  because  liis 
material  interests  are  provided  for  as  fully  as  justice 
admits  of ;  that  is  to  say,  commerce  is  based  upon 
justice,  not  upon  theft  and  knavery.  No  legal  hind- 
rance, therefore,  prevents  the  purchaser  getting  full 
value  for  labor  or  money.  The  question,  Wliy  does 
money  purchase  so  much  ?  does  not  appear  to  have 
ever  agitated  the  minds  of  your  moralists ;  tliough 
late  events  leave  no  doubt  of  the  fact  that  anvthine, 
however  sacred  or  valuable,  may  be  commanded  by 
money.  If  tlie  minister  of  the  Gospel  supposes  tlie 
Church  free  from  the  contamination,  he  has  only  to 
inquire.  Who  amongst  the  wealthy  members  of  his 
flock,  that  are  hungering  and  thirsting  after  righteous- 
ness, would  be  ready  to  obey  the  injunction,  "  If  ye 
would  be  perfect,  go  and  sell  all  thou  hast,  and  follow 
me."  It  would  be  a  trial  too  severe  to  many; 
tliey  would  rather  the  question  had  not  been  mooted, 
and  would  much  prefer  not  to  be  perfect.  The  can- 
cer of  avarice  eats  out  every  noble  quality  of  mind 
and  heart  in  a  community  when  the  purchasing 
power  of  the  money  principal  is  multiplied  by  an 
exhorbitant  interest.  The  preacher  may  bring  to 
bear  all  the  arts  of  moral  suasion  and  expostulation, 
and  the  judge  may  decide  his  cases ;  but  the  terrors 
of  law  and  Gospel  combined,  fail  to  discredit  money. 
It  is  too  true  what  the  poet  sang : 


The  horseman  serves  the  horse, 
The  neatherd  serves  the  neat, 
The  merchant  serves  his  purse, 
The  cater  series  his  meat ! 


r 


68 


bkns\lem; 


OR, 


'  Tin  the  day  of  the  chattel — 
Web  to  weave,  and  corn  to  grind  ; 
Things  are  in  the  saddle, 
And  drive  mankind. 


It  is  truly  said  that  man  is  the  product  of  his 
age,  and  is  not  so  much  influenced  by  argument  or 
moral  suasion  as  by  conditions.  What  an  individual 
returns  to  society  is  trifling  compared  with  the 
accumulated  advantages  conferred  upon  him  by 
civilization.  A  prominent  feature,  therefore,  in  the 
conditions  supplied  by  the  economy  of  Bensalem,  is 
the  entire  lack  of  towns  and  cities  in  my  country. 
Cities,  as  has  been  observed,  re  a  result  of  the 
centralizing  power  of  money,  >  '  ich  is  got  rid  of  by 
a  permanent  reduction  of  the  rate  of  interest.  Yours 
is  the  money  of  commerce;  ours  that  of  production 
and  manufacture,  and  on  that  account  it  contributes 
more  powerfully  to  the  increase  of  national  wealth. 
Cities  liable  to  pestilential  diseases,  physical  suffer- 
ing, moral  degradation — the  blots  and  canker  spots 
of  civilization;  where  the  poor  and  wretclied  hve  in 
cellars  till  they  become  decrepid,  blind  and  idiotic ; 
these  seething  centres  of  life  crowded  by  the  un- 
productive professions — liable  to  famine,  fire,  and  to 
an  increased  mortality  on  every  change  of  atmos- 
pheric temperature — present  a  spectacle  with  which 
our  citizens,  I  am  happy  to  inform  you,  are  but  little 
acquainted.  Our  population  occupy  a  broad  area. 
Our  factories,  like  our  fields,  are  spread  over  the 
face  of  the  country,  where  the  sun  shines,  the  bees 
hum,  the  flowers  blossom,  and  birds  sing  for  all; 
where  health,  enjoyment,  physical^beauty  and  moral 


THK    NKW     ECONOMY. 


69 


dignity  blend.  Gradually  the  severe  and  lengthened 
hours  of  toil  have  been  limited,  while  the  purchasing 
power  of  labor  has  been  increased ;  and  time  is 
afforded  for  agreeable  relaxation,  and  also  for  stud- 
ies of  an  intellectual  and  elevating  character. 

When  the  Security  Bank  was  first  established,  it 
was  thought  advisable  to  make  the  sub-mortgage 
exchangeable — a  terra  preferred  to  payable — at  thirty 
days'  sight,  in  gold,  with  the  understanding  that  the 
law  would  only  be  taken  advantage  of  when  large 
sums  were  presented.  This  worked  well.  All  ordin- 
ary demands  were  exchanged  at  sight,  saving  the 
sub-mortgage  a  decline  from  its  par  value.  This 
precaution  was  found  useful,  for  at  the  time  of  its 
introduction,  there  were  in  circulation  two  other 
styles  of  money;  against  the  prestige  of  which,  it 
had  to  make  its  way.  As  the  existing  systems  grad- 
ually succumbed,  less  and  less  gold  was  needed  to 
meet  demands.  Any  large  amount  was  met  by  a 
draft  at  thirty  days,  on  England  or  Germany. 
This  afforded  time  to  negotiate  for  gold  in  an 
emergency. 

A  large  foreign  debt  was  speedily  imported  and 
held  by  the  citizens;  and  finally  cancelled,  as  indus- 
try became  prosperous.  I  need  not  inform  you 
that,  to  use  a  vulgar  expression,  "  the  boot  has  been 
on  the  other  foot"  these  many  long  years.  It  is  the 
custom  of  our  merchants  to  get  whatever  they 
please  for  their  exports,  or  the  balance  of  trade; 
gold  is  not  wanted  now  except  for  plate,  spoons,  etc., 
so  they  generally  prefer  commodities,  such  as  teas, 
silks,  hides ;  and  it  is  no  brag  to  say  our  merchants 


T 


70 


BEN8ALMM. 


■yi  '■. 


and  manufacturers  now  defy  the  competition  of  the 
world. 

Before  bidding  adieu,  let  me  remark  in  regard  to 
the  libraries  of  Bensalem.     Tliey  are  filled  with  the 
ablest  works  in  every  language ;  but  tlie  greater  part, 
I  confess,  are  treated  more  as  a  matter  of  curiosity 
than  use ;  for  our  people  pay  little  attention  to  any- 
thing from  human  pen,  that  is  not  severely  scientific 
in  its  character.     Hence,  written  history,  as  the  world 
has  it,  shrinks  into  very  small  compass  indeed  in  the 
estimation  of  our  people ;  and  only  that  part  of  it 
is  valued  that  can  be  applied  to  present  purposes. 
The  great  panorama  of  Nature  is  ever  present  to  our 
consciousness.    "  Nature  is  bound  to  us  by  ties  so  deep 
and  tender,  it  is  so  high  above  us,  stirs  us  with  influ- 
ences so  mysterious,  speaks  to  us  in  words  so  moving, 
sympathizes  with  us  so  truly,  chides  us  so  gently,  so 
fervently  inspires  or  sternly  warns,  holds  out  to  us 
forever  so  bright  a  pattern,"  that  grown  persons  have 
no  time  to  waste  on  fiction.     We  indulge  the  children 
in  that  department,  however,  for  the  development  of 
imaginative  faculty  ;  hence  in  it  is  found  workg  of  the 
best  writers  of  fiction  in  your  language,  such   as, 
"  Robinson  Crusoe,"  "  Smith's  Large  Paper  Wheel," 
"  Paterson  on  Invisible  Capital,"  "  Don  Quixote," 
"  Mill's  Chapters  on  Paper  Money,"     "  Chevalier 
on  Gold,"   "  McCuUoch's  Lucubrations  on  Political 
Economy,"  "  The  Tale  of  a  Tub,"  etc. 


END    OF    FIRST    PART. 


& 


e 


j> 


5> 


&1 


